M A I N   N E W S

Centre’s no to restructuring of Rs 70,000-cr loan to Punjab
Ajay Banerjee
Tribune News Service

New Delhi, April 8
Punjab’s hopes of getting its massive and crippling debt of Rs 69,500 crore, restructured or waived, have been dashed to the ground. A part of this state debt is the money spent on financing the fight against militancy during the 1980s and early 1990s. Another major chunk constitutes the borrowings which were done during the same period to keep the state finances running. The three-member committee, headed by Secretary Expenditure, Government of India, Sushma Nath, was to suggest restructuring or waiving the loan. It has turned down the plea by saying: “It will set a bad precedent”. Last year, the 13th Finance Commission had recommended the debts of three states: Punjab, West Bengal and Kerala to the committee. The decision of the committee to reject all three demands was conveyed to the Government of India earlier this week.

Punjab hoped the Centre would share the pending Rs 10,000-crore burden of militancy, which includes principal and interest payment. Apart from this, the state had taken loans during 10 years of terrorism days (1983-1984 to 1993-1994) for its annual plans and budget. Presently, these loans stand at Rs 36,000 crore, including the interest component. The state was largely under Central rule during this period. Borrowing was the only option to keep the schemes running, said sources while explaining that revenue like sales tax etc had dried up under the shadow of the gun.

Due to the cascading effect, this fiscal Punjab will borrow Rs 8,923 crore from the market only to meet its Rs 6,530 annual interest liability. To come out of the vicious cycle, Punjab wanted a waiver of all loans taken to counter militancy and also the sum used to run the budget and annual plan. Minister of State of Planning Ashwani Kumar, who is a Congress MP from Punjab told the Tribune “We have assured the state that debt pending from days of terrorism can be treated as common burden of the country.”

Notably, Article 355 of the Constitution, that is often cited to dismiss governments, clearly states: It will be the duty of the Centre to protect every state against external aggression and internal disturbance. Punjab had cited that to get relief for the militancy period.