Modi, also the finance minister of the state, told Union Finance Minister Nirmala Sitharaman in a letter on Saturday that financial resources were required to get back on the economic recovery track and the government should not lose time in finding alternatives.
States were given two options for borrowing. In the first, Rs 97,000 crore can be borrowed but states would not bear the interest. The second option was to borrow `2.35 lakh crore but states would have to bear the interest.
Modi’s communication comes just ahead of the GST Council meeting on October 5 where the issue of borrowing by states to meet the shortfall would be discussed.