Bengal has made a fresh appeal to the Modi government to front load the release of central funds and relax the tough limit set on its budgetary deficit under the Fiscal Responsibility and Budget Management (FRBM) Act which place restrictions on its ability to increase market borrowings.

The state has argued that the huge impact on its revenue earnings as a result of the coronavirus outbreak has badly strained its finances.

Apart from seeking release of the entire annual revenue deficit grant for fiscal 2020-21 in the first quarter itself, the state has sought urgent access to the consolidated sinking fund (CSF) that is kept with the RBI.

The state had earlier demanded the full release of GST compensation and also wanted it to raise the FRBM ceiling on the state’s fiscal deficit.

Under the FRBM Act, the states must keep their fiscal deficit under 3 per cent of their respective gross state domestic product (GSDP). Bengal wanted the limit raised to 5 per cent, which would allow it borrow more from the capital markets.

Bengal finance minister Amit Mitra conveyed the demands in a letter to his central counterpart Nirmala Sitharaman— the sixth letter he has written in the past eight days.

The latest missive follows the Centre releasing Rs 6,195.08 crore on Friday (April 3) under the revenue deficit grant, which included Bengal’s share of Rs 417 crore.

Mitra had earlier demanded front loading the entire fiscal disbursal in three instalments during April-June.

“In order to tide over the critical situation, we had made a request for advance release of the revenue deficit grant provided by the 15th Finance Commission, where we urged you to release the full amount of the grant during the months of April, May and June 2020. For Bengal, this release will amount to Rs 5,013 crore in three instalments of Rs 1,671 crore for each of the three months,” Mitra wrote on Monday.

Officials from the state finance department said the demand was made in the light of the ongoing lockdown in India which has brought the economy to a halt, drying up the revenue streams of the states.

However, every state, including Bengal, is forced to mobilise additional resources now to fight the pandemic. “We wanted the Centre to front load the disbursal. The requirement is today, not after six months,” an official explained.

“We are dismayed that the Centre has released only Rs 417 crore for the month of April in the routine manner without taking into cognisance the unprecedented crisis. This is most disappointing at this critical hour of need to fight Covid 19 and disburse the committed expenditure,” Mitra wrote.

Recently, Bengal chief minister Mamata Banerjee had written to Prime Minister Narendra Modi, seeking Rs 25,000 crore from the Centre as part of the devolution to the state, according to the budget estimate of the government of India. She had also raised the

demand for the relaxation of the FRBM limit to 5 per cent, which will allow Bengal to borrow Rs 24,000 crore more to fund several programmes.

Mitra had earlier sought access to Rs 5,578-crore accumulated interest on the CSF kept with the RBI.