HYDERABAD: The 15th Finance Commission on Thursday met to discuss the immediate challenges in achieving the fiscal goals of both the Centre and the states amidst the lockdown.
"The main agenda of the discussion was the shortfall in revenues and the delay in GST compensation, which is likely to intensify in the coming days," a senior official aware of the details discussed in the meeting said. The official added that another major item on the agenda which is to be discussed was the high borrowing recorded by both the Centre and the states.
"State debt has gone up considerably. The members expressed concern over the lack of transparency by the states in mentioning the correct borrowing figures. The commission had flagged these concerns earlier too," the official said.
Led by the 15th Finance Commission chairman NK Singh, the panel will meet again on Friday to study the impact of the novel coronavirus pandemic on India’s GDP in financial years 2020-21 and 2021-22, and possible tax buoyancy and revenue assumptions for the period.
The countrywide lockdown has stalled economic activity across the board with massive job losses already mounting across sectors. the lockdown has also squeezed revenue streams for both the Centre and state governments.
Many states are demanding special packages from the Centre and extending such relief will be a challenging task given the fact that economy is likely to contract in the first half of this fiscal year. Economists expect the GDP growth in the first quarter to contract before improving and full-year GDP estimates for 2020-21 range from contraction to a marginal growth of around 1-2 per cent.