Chandigarh, May 31 (PTI) Congress Rajya Sabha MP Partap Singh Bajwa on Sunday accused the Centre of attempting to dictate its economic policy to states and cautioned that such a move could cause resentment among people.

In a letter to Prime Minister Narendra Modi, Bajwa raised the issue of linking the increase in borrowing limits of states with certain reforms.

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Bajwa wrote to the PM a day after furore over the “free power” issue in Punjab.

Chief Minister Amarinder Singh on Saturday had dismissed the Centre's suggestion on replacement of free power to farmers with direct benefit transfer as “totally unacceptable and a direct attack on the federal structure of the nation”.

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The CM had also alleged it was the Centre that was trying to impose the “anti-farmer” condition on the state in the guise of extending fiscal support and had also said the free power facility for farmers would continue till his government was in power.

The Shiromani Akali Dal had warned the Congress government that it would launch an agitation if the free power to farmers is stopped.

Bajwa in a letter to the PM on Sunday said the Union government has asked states to accept specific sectoral reforms for the states being able to access higher amount of funding.

“To avail the higher borrowing limits, the Centre has declared that power subsidies must be reformed in the state. This has forced the Government of Punjab to discuss direct benefit transfers of subsidies to farmers and other measures that could potentially affect their livelihood,” Bajwa wrote.

“By forcing the states to act in a certain manner, the Centre is attempting to dictate its economic policy. I caution that such moves will cause resentment amongst the citizens, especially in these economically distressing times,” he wrote.

Bajwa pointed out that such structural adjustment plans “do not always work well” and demanded that the states should be given space to create their own economic reform plans ably assisted by the Centre.

“The Centre must not give the states diktats that would lead to local resentment. The undercurrents of the same have already been felt in Punjab,” Bajwa wrote.

“I once again beseech you to work with the state governments in this process and not attempt to shoehorn reforms that the Centre believes are necessary, ignoring local economic and social conditions,” Bajwa said.

The Centre has allowed the states to borrow two per cent more of their gross state domestic product (GSDP) with strict reform conditions.

Punjab minister Tript Rajinder Singh Bajwa on Saturday had said that the Centre had imposed a condition of introducing direct benefit transfer (DBT) to all farmers in place of free electricity to become eligible for additional borrowing of 0.15 per cent of the gross state domestic product.

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