Debt waiver divides Punjab legislature

The proposal of Union Finance Minister Pranab Mukherjee to absorb half (Rs 35,000 crore) of the total accumulated debt (Rs 71,000 crore) of Punjab with certain preconditions, has put Punjab Finance Minister Manpreet Badal in a catch 22 situation.

Whereas Badal claims accolades for such a massive waiver as he has been consistently pressing the Centre to consider the plight of Punjab on the grounds of a decade of militancy and being a border state. His party colleagues consider it a politically incorrect decision. The rollback of subsidies as suggested by the Union finance minister are not acceptable to the legislatures of the ruling Shiromani Akali Dal.

No formal discussion of the cabinet members took place after the assembly session last week where the state finance minister disclosed the matter. But the issue has been discussed by the Political Action Committee (PAC) of the Shiromani Akali Dal. The PAC has recommended action against the finance minister for breach of discipline.

Badal told that there are other states like West Bengal, Maharashtra, Kerala and Uttar Pradesh who are in the same situation as Punjab. However, the largess offered to Punjab exclusively is like a windfall gain and the state should not take time to give its consent to the Centre.

Badal added that a political outfit cannot rule forever by inducing the voters with subsidy. The rollback of subsidies would add about Rs 4000 crore per annum to the states’ kitty.

Badal also said that the state government proposed to the Centre to reschedule the NSFF loan worth Rs 21000 crore for 30 years. Money on account of dues of Food Corporation of India (FCI) worth Rs 6000 crore and some other loans by the Centre can be absorbed as per the recommendations.

Articulating his difference of opinion with the Deputy Chief Minister and his cousin Sukhbir Badal he said that reforms cannot take place without sound financial health. He reiterated that as a cabinet minister he was answerable to the Chief Minister and not to the entire legislature.

Badal is scheduled to meet the Union Finance Minister next week and he has to create consensus among his party colleagues to accept the conditions laid down in lieu of the financial package.