Business Standard

Debt-ridden Punjab seeks special package


IANS Chandigarh
With Punjab's debt estimated at over Rs 2.10 lakh crore, Chief Minister Amarinder Singh on Wednesday urged the 15th Finance Commission to sanction a 'Special Debt Relief Package' to support his government's efforts to revive fiscal health, along with a one-time package to enable payment of the entire debt of the distressed farmers of the agrarian state.
At a meeting of the 15th Finance Commission with the state government here, the Chief Minister noted with concern the permanent loss of revenue suffered by the state post GST implementation, whose compensation from the Centre will also end from July 1, 2022, resulting in a drastic fall in revenue in the range of Rs 10,000-12,000 crore per annum.
"In view of the loss, the Chief Minister urged the Commission to recommend a graded compensation tapering formula to the government for states like Punjab beyond June 30, 2022, so that they do not simply 'fall off the cliff'," a spokesperson for the Chief Minister said after the meeting.
Highlighting the special problems of the state, with its highest SC (Scheduled Caste) population in percentage terms, its long and thickly populated border with Pakistan, its riverine and sub-mountainous areas and flight of industry due to concessions to neighbouring states, the Chief Minister shared his government's wish list with the Commission.
He underlined the need for a special package for Punjab, citing the various roadblocks to its development despite his government's numerous programmes and persistent efforts.
The Chief Minister, while submitting a formal memorandum to the Commission, pointed out that Punjab had the highest interest payments to total revenue receipts ratio and outstanding debt to Gross State Domestic Product (GSDP) ratio.
"The package could be provided under the General Debt Relief Scheme, linking it to the fiscal performance of the states as previously done by successive Finance Commissions," Singh stated.
With a debt of Rs 2.10 lakh crore, which his government had inherited from the erstwhile SAD-BJP regime, Punjab was a revenue deficit state, the Chief Minister noted, adding that the last Finance Commission had omitted the state from revenue deficit grant states, though it was included by the 12th Finance Commission.
On the issue of agricultural debt relief, while his government had already announced a package of Rs 8,000 crores for over 10 lakh small and marginal farming households, there was need for a comprehensive package and assistance from the Centre, the Chief Minister said.
He urged the Commission for a "one-time debt waiver to help out the farming community".

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First Published: Jan 30 2019 | 1:48 PM IST

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