Punjab Govt taps development authorities for Rs 2,500-crore loan to fund welfare schemes
Employees of development authorities have raised concerns, arguing that revenues from property sales and other proceeds should be ploughed back into local infrastructure and development works rather than diverted to the state exchequer.
To fund its populist schemes in election-bound Punjab, the AAP government has directed various urban development authorities to pool Rs 2,500 crore as a three-year loan, with the Greater Mohali Area Development Authority (GMADA) acting as the nodal agency.
The funds being routed through GMADA would be deposited with the state Finance Department. A senior official claimed that the money was intended to support ongoing development projects and land acquisitions, though sources link it to the government’s efforts to finance populist welfare initiatives.
Officials privy to the development said the current demand is also linked to “departmental charges” being claimed by the government for land acquisitions carried out under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Such charges were reportedly not pressed during previous regimes.
The largest contribution of Rs 1,000 crore has been sought from the Greater Ludhiana Development Authority. GMADA itself is contributing Rs 450 crore, followed by Jalandhar Development Authority (Rs 300 crore), Patiala Development Authority (Rs 250 crore), Bathinda Development Authority (Rs 200 crore), Amritsar Development Authority (Rs 150 crore) and Punjab Urban Planning and Development Authority (Rs 50 crore).
An official communication issued this week asked the authorities to transfer the amounts at the earliest, with some directions specifying a tight deadline.
This is not the first time the government has turned to these bodies for funds. Sources said the state has already drawn nearly Rs 6,500 crore from GMADA alone in the past one year. GMADA, which owes over Rs 6,000 crore in loans, has in the past relied on overdraft facilities against its vacant properties — an option described as more expensive than borrowing from sister authorities.
The eight development authorities under the Department of Housing and Urban Development collectively hold an inventory of unsold residential, commercial and industrial sites valued at over Rs 30,000 crore, with GMADA alone accounting for nearly Rs 24,000 crore. Recently, the government has recently asked all authorities to prepare a detailed inventory of properties that could be put up for auction.
Employees of these authorities have raised concerns, arguing that revenues from property sales and other proceeds should be ploughed back into local infrastructure and development works rather than diverted to the state exchequer.
