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Kerala Kaumudi Online
Friday, 29 March 2024 7.44 AM IST

States will not be allowed unlimited loans: Union Finance Minister

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THIRUVANANTHAPURAM: Union Finance Minister Nirmala Sitharaman on Saturday said that states cannot be allowed unlimited loans. She said that there is, however, no hindrance in allotting money to states for development purposes. The Union Minister was delivering the P Parameswaran Memorial Lecture organized by Bharatheeya Vichara Kendram.

"Many states borrow money for non-productive purposes and for allotting freebies for political interests. The central government's position is to increase capital investment for development. States will say no if the Centre tells them that it will give interest-free loans for 50 years for development projects. They prefer to take loans from the World Bank and foreign agencies. They justify their move by saying that the Centre will monitor if it grants the loans. Some states are claiming that they have the right to spend and borrow as per their wish. They also argue that any attempt to control this is anti-federalism. Borrowing limitlessly is a process that puts even the next generation in debt. According to Article 293 of the Constitution, the Centre can restrict borrowing by states. The present government increased the share of the finance commission from 32 to 42 percent. Another allegation is that the Centre is taking over the cess which is not shared with the states. It is political criticism. Cess is collected for road development, health and education. It is spent in every state. One can understand it if one looks at the money received. The GST Council, which consists of all the state ministers, is the model of a true federal system. It is a political allegation that Modi decides everything there. The Prime Minister has not participated in the GST Council. Politicians should avoid misleading the people by misinterpreting the federal provisions of the Constitution for the sake of political interest," the minister said.

Bharatheeya Vichara Kendram Director R Sanjayan presided over the function. Union Minister V. Muraleedharan, Sri Ramakrishna Ashram President Mokshavrathananda, O. Rajagopal, Dr. CV Jayamani, N. Mohandas and others were present.

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