Facing criticism for dragging his feet in pre-poll promise of “complete” debt waiver, Punjab Chief Minister Capt Amarinder Singh on Tuesday directed T Haq Committee to expedite submission of its report with clearly identified eligibility criteria and modalities to waive off loans of farmers in the State.
Captain, chairing a meeting of the expert panel, reiterated his Government’s commitment to farm debt waiver while issuing clear instructions to the committee and other concerned officials to prepare a complete roadmap for time-bound waiver of the loans as announced by his Government in line with the Congress poll promises.
The meeting also mulled issue of multiple crop loans by farmers, and committee was directed to go into the matter in detail and come out with conclusive ways and means to see how best to deal with it in the interest of the farmers.
Captain told the meeting that he was also simultaneously pursuing with Central Government’s various initiatives to provide relief to distressed farming community of the State.
Sought ‘one-time’ exemption from FRBM Act
In a letter to Union Finance Minister Arun Jaitley, Captain has sought one-time exemption to the Punjab Government from provisions of the FRBM Act, 2003, that restrict its borrowings to a maximum of three percent of GSDP, which comes to Rs12,819 crore.
“I have sought permission from Centre to allow State Government to raise additional borrowings of Rs10,000 crore from financial institutions or market to help mitigate financial distress of the farmers,” he said.
Pointing out that on the basis of consultations within Haq-led expert group, State Government had decided to provide an institutional loan waiver up to Rs2 lakh to marginal and small farmers, the CM in his letter said that through this debt relief, State was proposing to give relief to around 10.25 lakh farmers and the relief package would amount to Rs10,000 crore (approximately).
In view of the urgency and importance of the issue, a delegation led by State Finance Minister Manpreet Badal had met the Deputy Governor of Reserve Bank of India (RBI) as well as NABARD chairman on July 26-27.
“Though the RBI had said that the State would have to arrange funds from its own resources or borrowings for proposed debt relief scheme, given the constraint of resources, it would not be possible to extend this support to farmers from the State’s own resources,” said Captain.
Noting that the expected gap in revenues and expenditure in 2017-18 financial year had been projected at Rs10,273 crore, he said that the State would need to raise loans for this additional liability, but the provisions of FRBM Act, 2003, restrict State Government borrowings to a maximum of 3 per cent of the GSDP, which comes to Rs12,819 crore.
As a result, the State was not able to extend this debt relief scheme to the farmers until the limit of borrowings under FRBM Act, 2003, was relaxed and enhanced as a special dispensation for this purpose, he added.
The State Chief Secretary Karan Avtar Singh had already taken up the matter with the Centre’s Finance Secretary, Captainwrote, adding that the State Government was also, on its part, making all out efforts to mobilise additional resources and reduce its revenue expenditure through various measures viz imposition of professional tax, rationalisation of user charges or taxes etc, which were at advanced stage of decision or implementation.
“The receipt of various cess or fee, which were so far being collected and spent directly by various institutions, had already been transferred to the consolidated fund of the State. Moreover, the State was likely to earn handsome growth in revenues under the GST regime,” he said, adding that these additional resources shall be helpful in servicing the debt of the State.