Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs, chaired the meeting on pre-Budget consultation with states and Union Territories for the upcoming Union Budget 2025-26 in Jaisalmer on December 20.
Union Minister for State for Finance Pankaj Chaudhary along with Chief Ministers of Goa, Haryana, Jammu and Kashmir, Meghalaya and Odisha attended the meeting, the Ministry of Finance informed in a post on its X handle.
During the Pre-Budget Consultation meeting, state finance ministers from fiscally stressed states like Punjab and Kerala raised several concerns and requests for the upcoming budget.
Key points discussed included:
Special packages for fiscally stressed states: Both Punjab and Kerala demanded special financial packages to address their fiscal stress, highlighting the need for more flexibility in borrowing and support for debt management.
Increased allocation for long-term loans: The state FMs requested the Centre to increase the allocation for 50-year interest-free loans to aid in long-term infrastructure and capital expenditure (CAPEX) projects.
Land acquisition costs: There was a call for the Centre to bear a larger share of the costs associated with land acquisition, especially for infrastructure projects, to reduce the burden on state budgets.
Specific infrastructure projects: The discussion also included specific road and rail projects that the states are working on. States sought CAPEX updates and funding for these projects, emphasising their importance for local development and economic growth.
Increased borrowing space: The state finance ministers asked for increased borrowing space, allowing them greater flexibility to meet their financial obligations without compromising growth or development initiatives.
Honorarium for Asha workers: A significant request was the increase in the honorarium for Asha workers, who are frontline health workers providing critical services in rural areas. This was seen as essential to improve their welfare and maintain the public health workforce.
The meeting was focused on addressing the financial challenges faced by states and seeking support from the Centre in terms of loans, grants, and fiscal space.
Earlier in December, Nirmala Sitharaman had chaired a pre-Budget meeting with the stakeholders from Micro, Small and Medium Enterprises, to gather their inputs and suggestions for the upcoming Budget for 2025-26, expected to be presented on February 1.