States Demand Financial Flexibility: Pre-Budget Negotiations Begin

Finance ministers from various states, including Punjab and Kerala, have urged an increase in allocations under a 50-year interest-free loan scheme and sought special packages for financially stressed states. The states also pressed for additional funds, borrowing flexibility, and more support for disaster management initiatives.

In a crucial pre-budget meeting, finance ministers from several states advocated for enhanced financial allocations under a long-term interest-free loan scheme. Fiscally challenged states like Punjab and Kerala requested special financial packages and borrowing flexibility, insiders revealed on Friday.

The gathering with Union Finance Minister Nirmala Sitharaman saw states urging for higher borrowing limits and additional funding for initiatives like the Jal Jeevan Mission. Sitharaman highlighted the improved tax collections, addressing the higher fund transfers to states under the 15th Finance Commission compared to its predecessor.

Ministers stressed the need for increased disaster management allocations and specific infrastructure projects. States argued for adjustments in GST and other fiscal concerns, underscoring the financial strain and developmental challenges they face under current central policies.

(With inputs from agencies.)