'Lack of fiscal prudence', Punjab Governor shoots off letter to CM Bhagwant Mann

Ruchika M Khanna

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Chandigarh, October 17

Governor Banwarilal Purohit has told Chief Minister Bhagwant Mann that the performance of the government is causing concern on the issue of “inefficient governance accentuated by lack of fiscal prudence”.

The Governor has sought an explanation on additional borrowing by the government, over and above what was approved by the Assembly in the Budget, as it has not been utilised for the creation of capital assets.

In his latest letter fired at the CM today, a copy of which is with The Tribune, Purohit has also accused the government of diverting capital receipts for undisclosed purposes and sought a clarification on the issue.

Official sources in Raj Bhawan said the Governor had consulted officials in the office of the Comptroller and Auditor General, Punjab, before shooting off the letter as he found discrepancies in the utilisation of borrowings made by the government and the audited reports of the CAG.

“I am asking this question for the sake of transparency. I assure you that once such a comprehensive picture is available, we can approach the Government of India for assistance as the Prime Minister has always expressed commitment for Punjab,” reads the letter, also advising the CM that all public borrowings should be carefully calibrated so that the youth are not imperiled by unsustainable debt. Borrowings should ideally be leveraged for creation of capital assets and not for rolling out populist measures, he has further said.

This letter, the second one written by the Governor to the government on the issue of fiscal health of the state, says that the state is expected to follow prudent fiscal policies to manage its scarce financial resources.

On September 22, the Governor had written a letter asking the state government to explain how they had raised debt of Rs 50,000 crore in the past 18 months.

In his letter sent to CM today, Governor Purohit has said, “As per the information available, the state government is not managing its fiscal resources in an effective and efficient manner. For instance, in 2022-23, the government had borrowed Rs 33,886 crore, as against the approved amount of Rs 23,835 crore. This additional borrowing needs to be explained as it has not been utilized for creation of capital assets.

Funds used for clinics, schools

Sources in the government have said the funds have been used for building schools of eminence, mohalla clinics and for the upgrade of district hospitals. Everyone knows that the first year in government for any political party is spent on analysing the areas where asset building is necessary. However, the AAP government not only built assets in the first year of rule, but also spent money on welfare schemes for people, including 300 units of free power to domestic consumers.