Row at all-party meet on Lanka as Centre flags states' fiscal health

NEW DELHI: The all-party meeting on Sri Lanka turned stormy and controversial when the decision of the Centre to present the "worrying" economic situation of states, with a focus on some, triggered angry protests from opposition parties.

While the Centre, led by foreign minister Jaishankar, justified the presentation on financial situation of states by arguing that "fiscal prudence" was a key lesson learnt from the Lankan crisis, the states called it inopportune, in what appeared to suggest that the Centre was trying to make a political point. It came against the backdrop of PM Modi's weekend attack on "revdi culture" (a reference to freebies) that drew sharp reactions from some opposition-governed states.

The protests at the meeting were led by DMK and other Tamil parties, TMC, TRS, YSRCP, that said the meeting was about Lanka and the finance ministry's presentation on states should be avoided.

Jaishankar, seeking to pacify the protests by repeatedly arguing about the "lessons lear- nt" and citing the example of power dues as one of the cause of the meltdown in island nation, insisted the presentation be allowed. In a sharp riposte, YSRCP MP Midhun Reddy said if it was so relevant, the Centre should also present the national fiscal situation, and the comparative study with states.

In the presentation, the finmin secretary said the fiscal management of certain states was leaving little headroom for their developmental obligations or room for tackling crises. He mentioned Punjab, Uttarakhand, Bengal, Kerala, Tripura and Tamil Nadu, where up to 86% is committed expenditure to revenue receipts, largely devoted to interest and wages. He made a special mention of Telangana and Andhra for growth in annual debt in comparison to GSDP, and also a significant amount of off-budget borrowings.
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