Citing the collapse in revenues as a result of the lockdown of business and industry, as well as the increased essential health and relief expenditure, the Chief Minister urged the Prime Minister to ask the 15th Finance Commission to review its interim report for 2020-21, according to an official statement.
Singh requested Modi to direct the 15th Finance Commission to defer the submission of its full report to October 2021, when they will be better able to make a realistic assessment of the likely growth of the economy over the next five years.
"Nothing would be worse than getting committed to a five-year revenue sharing projection based on unrealistically high growth projections," he warned, suggesting that the Finance Commission could make another interim report for 2021-22.
"With the states continuing to shoulder their committed liabilities and facing new demands on relief and health infrastructure expenditure, it is only fair and just that the 15th Finance Commission should be requested to recommend a special COVID-19 revenue grant for the year 2020-21," Singh stated.
The Chief Minister sought an immediate three-month special financial assistance package to enables states to handle the additional health-related expenditure and basic relief expenditure. "The immediate three-month package may be adjusted against the Special COVID-19 revenue grant, as proposed," he said.
Singh proposed that the Finance Commission could continue the COVID grant for the next year with some modification depending on what the situation looks like at the end of the current year, and then submit its five-year projection by October 2022, as per the statement.
"The same should be financed through a special borrowing programme outside the ambit of the Fiscal Responsibility and Budget Management (FRBM) Act provisions," he added.
The Chief Minister also proposed increasing the deficit to make up the revenue shortfall, as was being done by other nations, the statement said.
( With inputs from ANI )