Punjab CM seeks special debt relief package, says post GST revenue loss Rs 12,000 crore per year

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, said the Chief Minister.

Published: 30th January 2019 03:44 PM  |   Last Updated: 30th January 2019 03:57 PM   |  A+A-

Punjab Assembly, Captain Amarinder Singh

Punjab Chief Minister Captain Amarinder Singh addresses the House. (Photo| PTI)

Express News Service

CHANDIGARH: Underscoring the tight financial situation faced by the state, Chief Minister Capt Amarinder Singh on Wednesday sought from the 15th Finance Commission a Special Debt Relief Package along with a one-time package to enable payment of the entire debt of the distressed farmers of Punjab.

At a meeting of the fifteenth Finan0000ce Commission here, Amarinder 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 to 12,000 crore per annum. In view of the loss, he urged the Commission to recommend a graded compensation tapering formula to the Union Government for Punjab beyond June 30, 2022, so that they do not simply ‘fall off the cliff’.

Highlighting the special problems of the state and flight of industry due to concessions to neighbouring states, while submitting a formal memorandum to the Commission, he pointed out that Punjab had the highest Interest Payments to Total Revenue Receipts ratio and Outstanding Debt to GSDP ratio amongst the GCS. The package, he said, 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.

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, he 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 8000 crores for over ten lakh small and marginal farming households, there was need for a comprehensive package and assistance from the Centre, said Amarinder, urging for a one-time debt waiver to help out the farming community. Further, to give relief to the farmers, promote agriculture diversification and realize Central Government’s vision of doubling of the farm income, he requested the Commission to provide for deficiency price support in maize and cane production to the extent of Rs. 12,350 crore and Rs. 300 crore, in order to give a boost to the allied activities in the farm sector.

He said the internal security threat arising out of a hostile neighbour and threat of spillover of J&K militancy, along with the problem of drugs further made the state a fit case for a special package. Expressing grave concern about the critical water situation in the state, Amarinder sought a Rs. 12000 crore grant for complete water cycle management in both rural and urban areas. He also asked the Commission to provide a financial assistance of Rs. 500 crore for river cleaning programme and Rs. 3,682 crore for ground water improvement by river augmentation through afforestation.

He brought to the Commission’s notice that the drug epidemic in Punjab also had strong correlation with rising unemployment among the youth. Punjab has a high youth unemployment rate at 16.60 per cent compared to the national average of 10.20 per cent due to slowdown in agricultural productivity, lack of industrialization, mismatch between educational qualifications. He requested the Commission to provide Rs. 300 crore for expansion and strengthening of OOAT clinics to rehabilitate patients of drug abuse.

Referring to the Rs 31,000 crore Food Account which the Akali government had taken over in its last days, he said the centre should take over the debt or Punjab should be given matching revenue deficit grant to offset the committed annual interest payment liability of Rs. 3240 crores.

Mooting increase in devolution to states to allow greater flexibility to use devolved funds qua relevant Centrally sponsored schemes, he also sought an increase in Punjab’s share in devolution from 1.5 per cent to 2 per cent, noting that the same had been reduced from 2.45 per cent to 1.57 per cent in the last 40 years. He suggested addition of certain new elements within the existing parameters like SC/ST to facilitate equitable distribution of resources among the states.

Amarinder further urged the Commission to provide support of Rs. 5,500 crore and Rs. 6,719 crore to its power infra and road infra, respectively. He also sought Rs. 100 crore for strengthening the cancer infrastructure and Rs. 505 crore for providing sewerage facilities in the villages on periphery of our towns.

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