New Delhi: The Union finance ministry’s decision to highlight its concerns over the increased borrowing of some Indian states at an all-party meeting on the Sri Lankan crisis Tuesday triggered strong protests from MPs from opposition-ruled states, ThePrint has learnt.
At the meeting, the parties — which included All India Anna Dravida Munnetra Kazhagam (AIADMK), the Dravida Munnetra Kazhagam (DMK) and the Telangana Rashtra Samithi (TRS) — questioned the Centre’s reference to states’ fiscal health while discussing what India was doing to help Sri Lanka, which is going through one of its worst economic crisis in decades, several opposition MPs who attended the meeting told ThePrint.
External affairs minister S. Jaishankar and economic affairs secretary Ajay Seth made presentations at the all-party meet from a political and foreign policy perspective on the turmoil and the island nation’s debt situation.
The meeting was called following appeals for India’s intervention from southern parties including the AIADMK and the DMK. The briefing was attended by leaders from 28 parties, with eight ministers from the Union government present.
The reference to states’ borrowing came when Seth was discussing Sri Lanka’s debt in his presentation, according to MPs.
Speaking to ThePrint, Saugata Roy, a Trinamool Congress MP from West Bengal who was at the meeting, said, “While referring to the huge debt that Sri Lanka is facing, the economic affairs secretary said that some states in India such as Telangana, Andhra Pradesh, Kerala, and Punjab also have a similar issue with increased borrowing. We strongly objected to it. What is the point of referring to the states’ financial burden while discussing the crisis in Sri Lanka?”
Elamaram Kareem, a Communist Party of India (Marxist) Rajya Sabha MP from Kerala, alleged that the Centre was deliberately trying to malign states. “Instead of referring to their own fiscal health, why is the Centre talking about the increasing debt burden of states in the context of Sri Lanka? What are they trying to prove?”
All India Majlis-e-Ittehadul Muslimeen (AIMIM) leader and Hyderabad MP Asaduddin Owaisi told ThePrint that the presentation was deliberately targeting some states.
He also quoted Jaishankar as saying that he had seen “misinformed comparisons” between Sri Lanka and India. To this, Owaisi said he pointed out that Sri Lanka was in this condition because the Rajpaksa government had tried to suppress data.
“I asked whether the Modi government can immediately release data on job losses and the percentage of child labour in India,” he told ThePrint.
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‘Highly stressed states’
At a meeting with chief secretaries of states in Dharamshala between 15 and 17 June, also attended by Prime Minister Narendra Modi, Union Finance Secretary T.V. Somanathan had made a slew of suggestions to help states improve their finances — including the “rationalisation of schemes and autonomous bodies and measures to reduce inefficient subsidies”.
These suggestions come on the back of the Reserve Bank of India (RBI) releasing a detailed study last month highlighting that at least 10 states have witnessed a slowdown in their own tax revenue, a high share of committed expenditure, and rising subsidy burdens. These, the report said, had stretched finances that had already been severely strained by Covid-19 further.
The “highly stressed” states, according to the study, are Bihar, Kerala, Punjab, Rajasthan, West Bengal, Andhra Pradesh, Jharkhand, Madhya Pradesh, Haryana, and Uttar Pradesh. Most of these states have surpassed their debt levels as prescribed by the 15th Finance Commission, the study said.
India ‘worried’ about ‘unprecedented’ situation
A third MP from a southern state, who did not wish to be named, said that Jaishankar also told the MPs that while India is helping Sri Lanka with humanitarian aid, it can’t interfere directly in the political affairs of another sovereign country.
“He said that India is on the board of the International Monetary Fund (IMF) and will support Sri Lanka in working with such international agencies. He said that India will try to help Sri Lanka through the diplomatic route,” the MP said.
The MP added that Jaishankar had called the situation in Sri Lanka “unprecedented” and said that India is worried about it.
AIMIM leader Asaduddin Owaisi said that he had also enquired if the Government of India would deny Rajapaksa entry to India — and if so, then why — and whether the National Security Advisor (Ajit Doval) had facilitated Rajapaksa’s travel to Maldives and Singapore.
“The foreign minister denied it,” Owaisi said, adding that Sri Lanka’s “endemic” neglect of its minorities was an issue that shouldn’t be forgotten.
“I also told the ministers that we should not forget the ISIS-like Easter bombing in Sri Lanka,” he said, referring to the suicide attacks in Colombo in 2019.
“Muslims and Tamils are not part of the new regime, and if any of these turn to violence, their ethnic link to Tamil Nadu can heat up. In that context, I also asked if India would work for an inclusive government in Sri Lanka.” he added.
(Edited by Uttara Ramaswamy)
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