States seek additional funds from Centre to tide over slowdown

NEW DELHI: Six states have written to the Centre to provide additional funds to help them beat the industrial slowdown, Parliament was informed on Thursday.

"State governments of Andhra Pradesh, Punjab, Maharashtra, Kerela, Uttarakhand and Goa have written to Prime Minster/ Finance Minister of India for provision of additional funds ... to tide over the impact of slowing down in the various industrial sectors," Finance Minister Pranab Mukherjee said in a written reply in Rajya Sabha.

The states have also asked for relaxation in targets set by their fiscal consolidation legislations for raising market borrowings.

As part of the second stimulus package, the Centre has already given flexibility to States by 0.5 per cent of the targets which will enable the states to raise altogether Rs 30,000 crore of additional market borrowings.

Mukherjee said that a letter was also received from the Empowered Committee of State Finance Ministers to give special grant of Rs 20,000 crore for construction and improvement of infrastructure. The first stimulus package included a provision of additional plan expenditure of Rs 20,000 crore in the current fiscal, he said.

The states have also asked for not giving "declared goods" status to aviation turbine fuel which will bind the states to impose only up to 4 per cent sales tax on jet fuel.

Mukherjee said that it has been decided by the Union government not to proceed with the proposal on ATF for the present.