Politics Rs 64,924 Cr Debt Pushing Punjab Towards Financial Bankruptcy’


Rs 64,924 cr debt pushing Punjab
towards financial bankruptcy’

Abhijit Prashar | The Daily Pioneer - Chandigarh - March 21, 2010

The staggering debt of Rs 64,924 crore and interest of Rs 5,764 crore owed to the Centre has been slowly pushing Punjab towards financial bankruptcy. Unless the Central Government either writes off this debt completely or restructures it, the State may not be able to stand on its own feet, feels Finance Minister Manpreet Singh Badal.

Speaking to The Pioneer, the Finance Minister said on how he intended to tackle the rising debt, “There are two aspects. One is, that almost Rs 6,000 crore was spent during terrorism on forces like Central Reserve Police Force, Border Security Force and the like. This amount has been waived off by the Centre.”

Badal said, “Second important aspect is that Punjab for 10-12 years was run by Governors and no taxes were collected during this period of time. No annual plans were in place then and the State Government used to borrow money. And with this, Punjab was multiplying its debt with every passing year.”

He said, “Having said that, I am not blaming the financial advisors of that time but we definitely want that this amount should be written off. The Centre has refused to this demand of ours but we are going to grapple with it.”

He lamented, “Despite our best efforts at debt management, additional resource mobilisation and the tax resources of the State having shown buoyancy, it is due to inadequate support from the Union Government that we continue to struggle with our debt burden.”

Badal said, “To reduce this burden, we had requested the 13th Finance Commission to either write off or to reschedule some of our debt. Whether they agree to reduction in the rate of interest from 10 to 12 per cent to a manageable five to six per cent or extending the loan for another 30 years remains to be seen.”