Fin Comm forms committee to resolve Rs 31,000 crore Punjab's food account

The 15thFinance Commission Wednesday announced the formation of a committee to find ways to settle the food account of Rs 31,000 crore, which the Congress government inherited from previous SAD-BJP regime.

"We have decided to constitute a committee headed by finance commission member Ramesh Chand to look into food legacy account issue within six weeks, with representatives of government of Punjab, Food Corporation of India and Ministry of Finance to look into all options which are available within the constitutional mandate," said Finance Commission Chairman N K Singh while addressing media Wednesday.

Punjab has been consistently seeking the resolution of food account of Rs 31,000 crore from the Centre.

The food account,which the erstwhile SAD-BJP government had taken over in 2017, just before assembly election results, arose because of the mismatch between cash credit availed for procuring wheat and paddy and the foodgrain stocks in the account books of the state procurement agencies since 2004.

TheRs 31,000 crore included Rs 12,000 crore principal and Rs 19,000 crore interest and Punjab has been paying Rs 3,240 crore interest per annum, which it has to pay for 20 years.

To a question on farm debt waiver as sought by Punjab Chief Minister Amarinder Singh, the Chairman said that the Centre had already made it clear that they were disinclined to make any contribution or give any waiver under article 293, which enhances borrowings except for those states which are in conformity with the Fiscal Responsibility and Budget Management Act.

Given the current status of stressed debt situation, Punjab does not have fiscal space to have additional borrowings as its fiscal deficit is way above three per cent, he observed.

They will have to accommodate any additional liability within the confines of borrowings they have, he said.

The chairman also stressed on larger consultations on debt waiver issue.

Meanwhile, an official release of the Punjab government stated that the Finance Commission Chairman assured the Chief Minister of all possible support to revive Punjab's fiscal health, while promising to look into all aspects of debt waiver to help the state's distressed farmers.

The Commission will take a holistic view of the state's fiscal situation in taking a decision on farm debt waiver, he said, while also underscoring the panel's commitment to ensure balanced socio-economic development in the state, which was facing a critical challenge in terms of poor financial health.