Neighbours hit, Centre tells states to cut debt burden

Jun 20, 2022

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NEW DELHI: The Centre has urged chief secretaries of all states to maintain a verify on rising debt burden and monetary deficit as their efficiency could have an enormous bearing on the nation’s financial system.
Sources mentioned the federal government has flagged that a few of the states are as massive as India’s neighbours similar to Pakistan and Sri Lanka, that are going through financial disaster, and they should take fast steps to deal with the rising considerations on their monetary well being.
TOI has learnt that the finance secretary made an in depth presentation earlier than the primary conference of chief secretaries held final week at Dharamsala. It confirmed which states have larger debt burden and the report of capital expenditure of every state.

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“A number of the chief secretaries assured the finance ministry officers that they might make detailed shows earlier than their respective state cupboard to apprise them concerning the points,” mentioned a supply.
One other official added the Centre has flagged considerations over how the state of affairs could exit of hand if fast steps usually are not taken.
In April, high bureaucrats on the Centre had flagged their considerations at a gathering chaired by PM Narendra Modi over populist schemes and freebies introduced by political events throughout elections. They’d warned that a few of these states might be heading the way in which of cash-starved Sri Lanka or Greece if the development remained unchecked.
The PM had directed the highest officers to analyse the long-term fiscal implications of the coverage measures and share them with states.
Officers mentioned that the central authorities officers additionally highlighted the necessity to undertake finest practices of different states for crop diversification.
Sources mentioned states have additionally been urged to deal with the standard of their academics. The states have been requested to fill vacancies of academics, prepare them and equip them with the newest applied sciences.
“Based mostly on these discussions, last suggestions can be made to the federal government, which is able to then be positioned earlier than the Governing Council of Niti Aayog for deliberation,” mentioned an official.



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