Live-tweeting some comments from a webinar hosted by Kerala finance minister Thomas Isaac on the State Finances in a post-covid-19 world. This is mostly paraphrasing and could've mistakes.

Yamini Iyyer of CPR pitches for a robust interstate coordinate mechanism: The experience of the pandemic is going to be very very state-specific. Have to think about designing an interstate formula that is much more agile. We are (now?) operating behind the veil of ignorance

Yamini Iyyer: National Health Mission has 2000 line items which makes expenditure impossible. Actual process of spending overloaded with paperwork and red tape. A single file in UP has to go through 22 desks before it is cleared. Need to make it speedy and effective

Yamini Iyyer: Pgms like NHM have to move it where it originally devised, flexible. And at the same time push for a 90-10% (division of distribution btw center and states, in that order), if not 100%, so that states are not burdened. States should receive funds for food security

Yamini Iyyer: Central schemes should be complimenting and supporting states rather than states running around implementing central schemes. States should be in a position to decide what procedure needed. Plus, affordable social security measures needed for migrants and the poor.

Balveer Arora ( @transcultura) gives a round-up on the central measures during the pandemic that he says are eating into state powers. He gives it a name— Canabilistic Federalism, meaning the hollowing out of the state powers. Asks if this going to be the new normal.

Praveen Jha of JNU: In terms of what was to be shared with states, of 6.46 lakh crore, only some 5 lakh crore are shared. Subsequently, the way things have panned out, it could only be worse, possibly a shortfall of 25-50% of what is shown in the budget.

Praveen Jha: At least as a one-shot emergency provision, a part of the cess and surcharges should be given to the states. States should be allowed to borrow more than what is the limit now. If there is a relaxation of 5%of GDP, that alone can lead to 1,12,500 cr.

Praveen Jha: Revenu gap support should be applicable to all states instead of a handful of states (as discussed now). Loan repayment moratorium extension must be considered. Provisional for capital expenditure in union budget should simply be passed on to the states right now.

SM Vijayanand, former Kerala chief sec, argues for a new conceptualization of the NDRF including pandemics, a new cess and rigorous taxing.
Ps: he is barely visible, but can hear a loud whistle of the cooker in the background, curious things these webinars

Susheel Khanna (IIM, Kolkata): Covid-19 is an economic emergency as much as a health emergency. There is going to be widespread hunger now. We are looking at a very large economic disaster, the bulk of which will be confronted by the states.

Susheel Khanna: 15-20% contraction expected in the economy. Isaac said he collected only Rs 250 cr out of Rs 2500 cr, Delhi fin min said he got only Rs. 350 cr out of Rs. 3500 cr. State govts have 90% collapse of revenues, they will have to be bailed out, will need some 5 lakh cr

have to move on to other things, stopping this thread for now.