West Bengal Chief Minister Mamata Banerjee on Tuesday wrote to Prime Minister Narendra Modi, urging him to allow states to borrow more by raising their FRBM limits to at least 5 per cent of their GDP during the fiscal year 2020-21.
"Needless to say that the states will then amend their FRBM commitments in their own legislatures as they find appropriate," she stated in her letter. The Chief Minister said that she is writing "urgently" in the backdrop of this "unprecedented global pandemic" which she said is already crippling the economy from the bottom to top in the midst of a slowing economy that was suffering from a "growth-recession".
"You would agree that as a result of the acutely necessary 'lock-downs' and closure of businesses in many states of the country including our own, the capacity of states to mobilise resources will be severely crippled," she said.
Banerjee stated that there is no doubt that GST collection will "plummet".
"Furthermore, with further fall in tax collection of the central government, the amount of devolution to states will also plummet," she added.