State front-loads borrowings to disburse salaries, pensions

CHANDIGARH: Punjab is facing its worst-ever fiscal crisis with the state government having to advance its borrowings to pay even salaries to its 3.5 lakh employees and pensions to around 1.5 lakh beneficiaries. This is not all. Bills worth Rs 5,000 crore submitted at the state Treasury are yet to be paid.

State front-loads borrowings to disburse salaries, pensions

Manpreet Badal, Finance Minister - File photo

Ruchika M Khanna

Tribune News Service

Chandigarh, December 1

Punjab is facing its worst-ever fiscal crisis with the state government having to advance its borrowings to pay even salaries to its 3.5 lakh employees and pensions to around 1.5 lakh beneficiaries.

This is not all. Bills worth Rs 5,000 crore submitted at the state Treasury are yet to be paid.

The state government remained in overdraft for 14 days last month, and even now it is availing ways and means advances. 

The state government has sought an urgent meeting with Union Finance Minister Nirmala Sitharaman on Tuesday.

“There is no money for any development activity or for fulfilling other liabilities. Centre’s inability to release state’s share of the Goods and Services Tax amounting to Rs 4,100 crore since September is what has led us to the brink,” Finance Minister Manpreet Singh Badal told The Tribune.

Manpreet said he was working to ensure that the state finances did not go in for over drafting and that they were back on track by December, but the Centre’s inability to pay them the GST dues and share in central taxes of Rs 800 crore  had brought his efforts to a naught.

Punjab needs Rs 1,950 crore each month to pay salaries and another Rs 950 crore for the payment of pension. 

To meet this liability, the state government has advanced its borrowings. 

“Last month too, the state government had paid salaries in a staggered manner. This month, we are front-loading the market borrowings to ensure timely payment of salaries,” said the Finance Minister.

Other than the GST dues, Rs 800 crore share in the Central government taxes too has not been released by the Centre. “We will be taking up all these issues with the Union Finance Minister on Tuesday,” said Badal.

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