The union government has allowed 28 states to cumulatively borrow up to Rs 3.2 lakh crore for the first nine months of the fiscal year in one go in the ongoing month of April itself, reports Economic Times.
The move is likely to aid the states to muster greater financial muscle for deployment in the fight against the COVID-19 pandemic. The development comes after the Union Ministry of Finance (MoF) had approached the Reserve Bank of India (RBI) on 23 March to make arrangements for the states to raise up to 50 per cent of their net borrowing ceiling for the fiscal 2020-21.
With the nod from the centre, the state governments in Maharashtra, Tamil Nadu, West Bengal, Rajasthan, and Punjab have been empowered to borrow up to Rs 46,182 crore, 28,880 crore, 20,362 crore, 16,387 crore, and 9,098 crore respectively.
It should be noted that the latest push from the centre comes just days after the MoF had released Rs 17,287.08 crore to the states in revenue-deficit grants and state disaster response mitigation funds for fiscal 2020-21.
Meanwhile, a few states like Maharashtra and West Bengal have also sought packages to the tune of Rs 25,000 crore. Tamil Nadu on the other hand has requested for a package to the tune of Rs 4,000 crore along with other financial support.
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