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Panel to look into Punjab's Rs 31,000 crore food account issue

IANS  |  Chandigarh 

on Monday welcomed the 15th Finance Commission's move to notify a committee to look into the Rs 31,000 crore food account issue between the government and the Centre.

The said "it could lead to early resolution of the issue related to the legacy debt of Rs 30,584 crore, which was threatening to cascade into a major fiscal crisis for the state."

The committee, to be led by Ramesh Chand, member of the and the 15th Finance Commission, has been asked to submit its report within six weeks.

The N.K. Singh, at a meeting with the government on January 30, accepted the gravity of the issue, an official said.

"The committee has been mandated to look into all aspects of the legacy debt of the arising out of accumulated CCL (cash credit limit) with reference to of India/and Public Distribution.

"The committee would also recommend contours of suitable resolution that would be fair and appropriate to all stakeholders and Punjab, thus enabling the state to manage the fiscal challenge arising out of the debt stock and servicing cost due to the legacy debt," the said.

"The legacy debt was created by the erstwhile which, in the last leg of its tenure, had persuaded the Centre to convert the CCL gap into a clean long-term loan for the state. This inflated the state's fiscal deficit to 12.34 per cent of GSDP (gross state domestic product) in 2016-17.

"The debt servicing of this amount would alone amount to Rs 3,240 crore per annum till September 2034. This will result in total outflow of Rs 57,358 crore during the repayment tenure of the loan," the pointed out.

The government in Punjab had pleaded the 15th to consider the matter and award a suitable debt relief package to the state.

Punjab is facing severe financial crunch with a mounting debt of over Rs 2.10 lakh crore.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 11 2019. 21:12 IST