In a pre-budget meeting with Union Finance Minister Nirmala Sitharaman on Friday, state finance ministers demanded more funds under the 50-year interest-free loan scheme. Sitharaman said in her statement that due to a healthy macroeconomic environment, faster tax collection and efficiency, the amount transferred to the states in the last 45 months under the 15th Finance Commission is more than the amount transferred in 60 months under the 14th Finance Commission.
An official statement said, “The Union Finance Minister also mentioned the Special Assistance Scheme to States for Capital Investment (SASCI), which was first announced in the General Budget 2020-21. It has received a very good response from the states.
Punjab, Kerala demand flexibility in borrowing
As per sources, financially stressed states like Punjab and Kerala also demanded special packages and flexibility in borrowing. The states demanded additional funds under the Jal Jeevan Mission along with higher borrowing limits to support fiscal activities.
According to sources, Maharashtra sought funds for the ‘Mukhyamantri Majhi Ladki Bahin Yojana’ and said that a centrally sponsored scheme (CSS) with 50-50 per cent cost sharing by the Center and the state should be started.
Budget to be presented on February 1
It must be noted that the financial year 2025-26 budget will be presented in Parliament on February 1, 2025. Finance ministers of all the states and Sitharaman participated in the meeting held for consultation. The states requested more flexibility in the Special Assistance for Capital Investment (SASCI) scheme.
Concerning road and rail infrastructure, the states stressed the need for road development projects and railway projects, sources added. They also demanded an increase in the honorarium being paid to Accredited Social Health Activists (ASHA).
More funds for disaster relief
Sources said some states asked the central government to bear a major part of the land acquisition cost for the projects. The states stressed the need for additional funds for disaster relief and pressed for more allocation for the State Disaster Response Fund (SDRF).
Kerala Finance Minister K N Balagopal said fiscal empowerment achieved by restricting government expenditure may not have desirable results.
(With inputs from PTI)