Capt seeks debt relief package to revive Punjab’s fiscal health

CHANDIGARH: Underscoring the tight financial situation faced by the state, Punjab Chief Minister Capt Amarinder Singh on Wednesday sought from the 15th Finance Commission a special debt relief package to support his government’s efforts to revive fiscal health.

Capt Amarinder Singh with Finance Commission Chairman NK Singh. Photo: Finance Commission of India/Twitter

Tribune News Service
Chandigarh, January 30

Underscoring the tight financial situation faced by the state, Punjab Chief Minister Capt Amarinder Singh on Wednesday sought from the 15th Finance Commission a special debt relief package to support his government’s efforts to revive fiscal health.

He also sought a one-time package to enable payment of the entire debt of the distressed farmers of the state.

At a meeting of the 15th Finance Commission here, the CM noted with concern the permanent loss of revenue suffered by the state post GST implementation, whose compensation from the Centre would also end on June 30, 2022, resulting in a drastic fall in revenue in the range of Rs 10,000-Rs 12,000 crore per annum.

In view of the loss, the CM urged the commission to recommend a graded compensation tapering formula to the Centre for states like Punjab beyond June 30, 2022, so that they did not simply “fall off the cliff”.

Highlighting the special problems of the state, with its highest SC population in percentage terms, its long and thickly populated border with Pakistan, its riverine and sub-mountainous areas and flight of industry due to concessions to neighbouring states, Amarinder shared his government’s wish list with the commission, underlining the need for a special package for Punjab, citing the various roadblocks to its development despite.

While submitting a formal memorandum to the commission, the CM pointed out that Punjab had the highest interest payments to total revenue receipts ratio and outstanding debt to GSDP ratio. 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.