Debt-ridden Punjab seeks loan waiver, CM meets FM

Debt-ridden Punjab seeks loan waiver, CM meets FM

State finances hit during long period of militancy

Reeling under a mounting debt which has crossed Rs 77,585 crore, the Punjab government has sought a complete waiver of the outstanding small savings loan of Rs 22,202 crore, a state government spokesman said here on Tuesday.

Chief Minister Parkash Singh Badal has sought the personal intervention of Union finance minister Pranab Mukherjee, wanting that either the outstanding small savings loan, as on March 31, 2012, be waived or a moratorium of repayment of principal and interest on the loan be granted for five years from the current fiscal.

Badal met Mukherjee in New Delhi on Monday evening along with deputy chief minister Sukhbir Singh Badal and Bathinda MP Harsimrat Kaur Badal.

“They apprised the Union finance minister that Punjab was a revenue surplus state till 1986-87. State finances were adversely affected during the long period of militancy and President’s rule. On the one hand, the state had to incur heavy expenditure on security and on the other, little effort was made to mobilise additional resources.

Even the industry didn’t find the border state with a hostile neighbour an attractive destination for investment,” Badal pointed out to the Central government in his representation.

Besides the tax concessions to neighbouring states in 2000-01 rendered the manufacturing sector totally uncompetitive. 

The state had ruined its soil and water resources and was incurring having expenditure on power in order to ensure national food security,” he pointed out.

Badal said that the 13th Finance Commission had identified three states -- West Bengal, Punjab and Kerala -- which had revenue deficit in the financial year 2007-08 as “debt stressed”.

With a debt of Rs 77,585 crore as on March 31, 2012, the annual interest liability of Punjab was about Rs 6,500 crore.  Mukherjee assured that he would convene a meeting of the senior officers of the finance ministry soon to settle all the pending issues on the priority.

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