Opposing the Centre’s move to put forth “needlessly onerous” conditions for increasing the borrowing limits of States, Chief Minister Edappadi K Palaniswami on Monday shot off a strongly-worded letter to Prime Minister Narendra Modi, stating that the move lacked consensus and was not in keeping with the spirit of cooperative federalism.
Aggressively pushing a reforms agenda on which a consensus is yet to be built is not in keeping with the spirit of cooperative federalism, Palaniswami told the central government on Monday. He also said it is unreasonable to attach conditionalities for borrowings beyond three per cent of the state gross domestic product (GSDP).
In a letter to Prime Minister Narendra Modi, Palaniswami said: “Aggressively pushing a reform agenda on which a consensus is yet to be developed at a time when states have approached the Centre for additional borrowing out of sheer desperation, is not in keeping with the spirit of cooperative federalism.”
Referring to the communication dated May 17 from the Union Ministry of Finance, which attached conditions for increasing the borrowing limits, the Chief Minister said, “Imposing needlessly onerous conditions on borrowing will constrain States in finding funds to meet essential expenditure in the wake of a serious financial situation.
I am confident you will appreciate and understand the difficulties that States face at this time and instruct that necessary changes be made to relevant guidelines.”
Palaniswami said, ideally, the proposed reforms ought to have been discussed in detail with the states, a consensus developed depending on the specific conditions in each state, and the reforms linked to special central Covid grants, and not to additional borrowing by the state.
“Linking the central government”s power under Article 293(3) of the Constitution to permit additional borrowing by the states to conditionalities is unprecedented,” he added.