Bailout packages for fiscally stressed states are in the works, as the government seeks to garner political backing for the key policy reforms it plans to fast-track after the five state elections. A senior finance ministry official involved in the process said a high-level committee under expenditure secretary Sumit Bose had held consultations to identify measures to help West Bengal, Punjab and Kerala.
West Bengal Chief Minister Mamata Banerjee has been demanding a bailout package from the Centre to improve the fiscal situation of the severely debt-ridden state.
The Trinamool Congress leader's blocking of foreign direct investment in multi-brand retail and other policy measures of UPA-II is being seen, among other things, as a reaction to the delay in a bailout package for West Bengal.
The state government is scheduled to present its first Budget immediately after the Union Budget. The official said since it would be difficult for the Centre to help just one state, a comprehensive package for other states in trouble was being worked out.
It would be developed keeping in mind the tight fiscal space available with the Central government, he said.
The official said the panel was slated to resume work to concretise the states' bailout package after the Assembly polls would end in the second week of March.
But he hinted its contours could be outlined in the Budget by Finance Minister Pranab Mukherjee.
That,
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