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Punjab seeks loan waiver

Staff Correspondent

Debt was incurred to combat terrorism, says Amarinder


  • Issue raised at Chief Ministers' meet in Delhi
  • Finance panel favoured moratorium on payment

    CHANDIGARH: Punjab Chief Minister Amarinder Singh on Friday pleaded with the Union Government to waive off the outstanding amount of loan along with interest payable by the State from 1984-85 to 1993-94 availed for combating insurgency and terrorism.

    According to an official release here, Capt. Singh raised the issue while taking part in the Chief Ministers' conference on internal security and law and order in Delhi. He said the Centre had extended special term loans of Rs. 5799.92 crores to Punjab from 1984-85 to 1993-94 to contain terrorism. The 11th Finance Commission had recommended a moratorium on payment of instalments of debt and interest on the outstanding special term loans for the years 2000-2005, amounting to Rs.3772 crores, as the expenditure incurred on security was to be worked out by the Ministry of Home Affairs in consultation with the State Government and the Ministry of Finance. It had recommended debt relief for the state after the period of moratorium.

    Subsequently the Punjab Government made a representation, with the 12th Finance Commission, to waive off the outstanding special term loan, citing Article 355 of the Constitution, the assurance by the then Prime Minister and the poor fiscal position of the State.

    Capt. Singh said the State Government had since worked out the security related expenditure and forwarded the same for consideration by the ministries of Home Affairs and Finance. Pending finalisation of the amount for which debt relief was to be allowed, the 12th Finance Commission had recommended the continuation of moratorium on repayment till 2006-07.

    Taking up the issue of modernisation of the police, Capt. Singh sought that the Union Government declare Punjab as a category `A' State for entitlement of 100 per cent grant-in-aid along with higher budgetary allocation keeping in view its strategic location.

    He pointed out that the allocation of funds by the Centre in this regards had come down from Rs. 71.50 crores in 2000-01 to Rs. 59.66 crores in 2003-04, while the actual amount released in the year 2003-04, was Rs.18.05 crore only. The main reason for inadequate release of funds was the inability of the state government to contribute its share owing to a severe resource constraint.

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