Center to issue a white paper on the entire financial and fiscal situation, So the solution will likely be better. Otherwise, The matter will remain entangled in the controversy of Center versus State.
The issue of rising arrears on the states of power distribution and generating companies has now been raised by the Prime Minister himself. Narendra Modi has asked the states to clear the dues at the earliest. Their contention is justified that due to non-payment of dues, companies are not able to invest in increasing production or improving the distribution structure. As a result, it has not been possible to prevent the loss of electricity in distribution. It is said that about 20 percent of the total electricity generated in India is wasted during distribution. Whereas in developed countries this average is about seven percent. Therefore, the outstanding dues of electricity generation and distribution companies of about one lakh 30 thousand crores is really a big problem. This problem is directly related to the financial condition of the country. Therefore it cannot be ignored. However, the question is important as to why the state governments are not paying this amount. There have been reports that the financial condition of the states is bad.
This situation worsened during the Corona epidemic. After the implementation of GST, the sources of resources mobilization with the states have become limited, so the state governments are going into arrears and debt. Clearly this is a national problem. But this is not the only problem. Rather, there is also an allegation that the Center itself is increasing the burden on the future of the country by mobilizing its today’s expenditure from bonds. For example, the same route has been adopted for the refinancing of banks now facing the problem of bad loans. The debt on the center itself has also increased. The question is, why is the fiscal crisis deepening between the Center and the states? If complete information is provided in this regard, then there can be scope for moving towards a solution. Therefore, the expectation is that since the Prime Minister has raised an important issue, there should be complete talk on all such issues. If the Center releases a white paper on the overall financial and fiscal situation of the country, the chances of this happening will be better. Otherwise, the matter will remain entangled in the Center versus the State controversy.
