Conveyed my concern to Hon. @PMOIndia and @nsitharamanoffc and drew their attention towards the following economic indicators and strategy to overcome the crisis faced by the State.

1) It is learnt that ,the revenue receipts projected in the Maharashtra Budget of 2020-21 are about 3,47,000 crores. And Economic activity is not likely to pick up much in the short term and may improve slightly in the medium term.

Accordingly, as per the revised estimates the expected revenue shortfall would be 1,40,000 crores. This is around 40% of the expected revenues and will leave a huge hole in the state finances.

2) As per the present borrowing limits (3% of GSDP), the state can borrow up to 92,000 crores, out of which 54,000 crores has been planned for meeting the capital expenditure requirements for the financial year 20-21.

So, it is clear that sate is going to face a shortfall of 1,00,000 crores to sustain projected expenditure.

3) One strategy could be to enhance the FRBM borrowing limit and borrow more. However, covering the entire shortfall only through borrowing, will push the state towards a potential debt trap.

The other strategy could be to cut public spending, however that would be counterproductive in view of subdued economy. In fact there will be additional expenditure requirements in the area of public health and medical education and other public services.

4) The state makes a repayment of Rs 10,500 Cr every year on account of the NSSF loan given by Government of India. It is requested to extend two-year moratorium on loan repayment. It will help in bridging the likely budgetary gap.

5) Further, it is imperative that in these testing times the Government of India should offer suitable financial assistance to states also. The Government of Maharashtra requests additional grants of untied nature to the tune of 1 Lakh Crores for the FY 2020-21.

Almost all countries US, Spain, Germany, France, Australia etc. have released financial packages of around 10 % of GDP. Thus, room can be created by Government of India along with RBI for giving suitable financial package to states.

6) It is heartening that central packages have been released for the poor and vulnerable, financial institutions, businesses and others. Similar financial packages need to be given to states.

In the eventual recovery of the Indian economy the states will play a major role and if left out without any help, the states will not be in a position to supplement the required national government efforts.

There should not be much problem in central government resorting to deficit financing. It is felt that borrowing by central government will be much more efficient and cheaper compared to borrowing by the states.

In addition the following points were conveyed to the Hon. Prime Minister @PMOIndia and the Finance Minister @nsitharamanoffc

The pandemic #Covid_19 has hit urban areas the hardest and has battered urban economy. Aviation, transport, tourism, hospitality, brick and mortar retail, entertainment, media and the wellness industry have been hit very hard and may not ever regain their financial health.

All businesses unable to handle ‘social distancing’ will suffer heavily. Sizeable number of businesses are likely not to survive and many will lose their jobs. They will have to be reskilled for alternate employment and alternate businesses will have to be actively promoted.

In history, India has experienced many catastrophic situations and we Indians, have successfully overcome these predicaments with sheer courage, patience, perseverance and hard work.

With rational optimism, I could see some new opportunities appearing on the horizon and I would like to draw your kind attention towards some policy endeavours , that would prove beneficial to our economy.

The Government needs to actively promote and encourage business via E-commerce and home-delivery. Conventional shops and stores will be at a disadvantage in view of various restrictions and social distancing norms which may acquire permanence.

This will also lead to creation of jobs and ease the problem of unemployment too. The opportunities also lie in the area of telemedicine. Telemedicine still is in infancy. Out of necessity, remote visits will become more popular.

While theatres and malls will continue to suffer, online entertainment platforms will expand and become more profitable.

Similarly, while gyms will suffer, online work out sessions will be in great demand. Spas and Beauty saloons will find it difficult to survive. Consequently, the household demand for health, wellness and beauty products will see a major spike.

Parallelly the commercial demand for such products may nosedive. Thus, manufacturers will need to accordingly recast their product portfolios as consumption will migrate from commercial establishments to households.

The Government therefore needs to develop appropriate policies to encourage and recognize these new businesses opportunities as viable and bankable projects and reskill workers for the emerging sectors.

Regulatory frameworks and credit systems should be speedily put in place for this new breed of enterprises and entrepreneurs. Early preemptive action with respect to these emerging businesses can make India a formidable player in the new post Covid economy.

In terms of manufacturing India should move fast and take steps to capture the space likely to be released by China. All the nations have realized the need for a more diverse supply chain in order to have reliability in supplies.

I suggest a proactive engagement with G-20 and BRICS in this regard along with a suitable policy framework to encourage these nations to shift manufacturing bases to India.