Chillin' out till it needs to be funded
With the first economic stimulus package – which included duty cuts and other sectoral incentives – still to take off, the government has already started work on the second package expected next week as yet another booster dose to the slackening economy.
Citing a considerable slowdown in revenue collections, the states have requested for additional Rs 20,000 crore from the central government for use in infrastructure development, housing and social sectors. In addition they want the Fiscal Responsibility and Budget Management FRBM targets to be relaxed to enable more market borrowing.
The state finance ministers have virtually asked for a bailout from the Centre and for this the path now leads to the Prime Ministers Office with states planning to call on the PM soon.
The states have also opposed the cut in the sales tax rate of ATF to 4 per cent. They are now facing a tedious task as they lose revenues thanks to a cut in sales tax on diesel and petrol.