The states revenue has been in jeopardy due to the COVID-19-induced lockdown, while salaries, interest payments, and other expenses have not changed. To make matters worse, the states have had to beef-up their health infrastructure and on COVID-19 measures. As the situation gets worsen day by day all states are now asking for financial assistance from centre, and relaxation borrowing from RBI. Some states in desperation have started selling liquor breaking the social distancing norms. The article also suggests centre on reducing fiscal deficit targets of states from the current 3% to a minimum 4.5%. It also suggests giving states an upper hand on how they should restart their economy based on their own assesment as not all states are equally damaged by the virus and in states also not all districts are equally damaged.
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