In an environment where Sensex and Nifty were punished in trading over the week, the Government of India looked to the states for their input and demands on the upcoming budget. These pre-budget consultations chaired by the union finance minister Nirmala Sitharaman at Jaisalmer in Rajasthan on Friday were attended by state ministers as well.
In the meeting, Sitharaman said that the Government of India allocated an additional Rs 30,000 crore as "untied funds" under the Special Assistance for Capital Investment (SASCI) scheme for the fiscal 2024-2025. The states could use the funds to lift their spending and create capital assets in any sector, the minister added.
In attendance were the chief ministers of Goa, Haryana, Jammu and Kashmir, Meghalaya and Odisha; deputy chief ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, Rajasthan and Telangana; and finance ministers of states, along with union minister of state for finance, Pankaj Chaudhary.
Various participants pitched their suggestions to the union finance minister to be included in the union budget for the upcoming fiscal 2025-2026. Tamil Nadu's finance minister, Thangam Thennarasu, urged the centre to add new railway projects for the state and demanded central assistance for relief in areas hit by Cyclone Fengal.
Thennarasu also asked for metro rail projects for the cities of Coimbatore and Madurai to be included in the budget.
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Other major state demands came from Punjab and Kerala, both urging for special packages to limit financial stress, increased flexibility in borrowing, and a bump in funds under the Jal Jeevan Mission.
The union budget for the upcoming fiscal 2025-2026 is set to be presented in the Indian Parliament by Sitharaman on February 1, 2025. With more states demanding increased breathing room regarding borrowings under the SASCI scheme, Sitharaman assured that the centre planned more funds to be dispensed under SASCI for the states affected by severe disasters, as assessed by the Inter-Ministerial Central Team (IMCT).
"The states which suffered a natural disaster of severe nature (as assessed by IMCT) in FY 2024-2025 may be eligible for up to 50 per cent of their allocation under Part-1 (untied funds) of the SASCI scheme. This amount will be in addition to the funds provided under the National Disaster Response and Mitigation Fund (NDRMF)," the Ministry of Finance stated, quoting Sitharaman.
The states also demanded more allocation for road and rail development projects.
