Punjab coffers empty, Captain Amarinder Singh to meet Arun Jaitley today with bailout plan

The state, sources said, will handle the cooperative banks and societies that have lent about Rs 3600 crore to 6 lakh farmers. These banks fall under the purview of the state government.

Written by Kanchan Vasdev | Chandigarh | Published:July 20, 2017 8:36 am
Amarinder Singh, Arun Jaitley, Punjab farmers, Punjab farmers loan waiver, Punjab farmer loans issue, India news, National news Punjab CM Captain Amarinder Singh.

The Punjab government is all set to seek Union Finance Minister Arun Jaitley’s help to convert into a term loan Rs 6,000 crore lent by national and private banks to 4.5 lakh farmers.

With state coffers empty and a farm loan waiver of Rs 9500 crore already promised, the state government is seeking help from the Centre for a bail out. Chief Minster Amarinder Singh will meet Jaitley in Delhi on Thursday to seek Centre’s help to extend a loan waiver.

Sources in the government said that though Jaitley had already refused financial assistance, Amarinder will make a case to the FM that the state was extending loan waiver to as many as 6 lakh farmers, under debt of Rs 3500 crore of cooperative banks and 4.5 lakh farmers, who had taken loans worth Rs 6,000 crore from national and private banks.

While it is learnt that the CM would impress upon the FM to bail the state’s farmers out with whatever fiscal assistance possible, the government is also seeking Jaitley’s help in converting Rs 6,000 crore into a term loan. The state requires directions from Reserve Bank of India to the banks to convert the farmers debt into a term loan against state government.

The state, sources said, will handle the cooperative banks and societies that have lent about Rs 3600 crore to 6 lakh farmers. These banks fall under the purview of the state government.

A government functionary said, “Since there have not been much borrowings after demonetisation, the banks are flushed with money. It is not difficult for any bank to give a term laon of Rs 6,000 crore to the Punjab government. We will try to get the loan at 7.5 per cent rate of interest but even 8.5 per cent will be acceptable.”

The CM will also take up the issue of Rs 31,000 crore term loan, dubbed as foodgrain scam under the previous SAD-BJP government where central loan for foodgrain procurement was allegedly misused. Sources said the state is ready to pay the principle amount of Rs 12,500 crore, but not the interest amount of Rs 18,500 crore. The CM had earlier met Prime Minister Narendra Modi and also taken up the issue with him. Amarinder had called Rs 12,500 crore a Cash Credit Limit (CCL) legacy gap and Rs 18,500 crore as exorbitant interest for conversion of the gap into term loan.

The state has been taking a plea that it will pay Rs 270 crore every month for next 20 years at the cost of welfare schemes of the state.

A statement by the government said the gap should be proportionately shared by all concerned agencies in a just and fair manner. It said the gap had resulted from difference in actual expenditure and expenditure approved in cost sheet approved by the Department of Food

& Public Distribution (DFPD), Government of India, and the inability of the state government agencies to fully repay the CCL. The spokesperson for the government added that the DFPD had repeatedly assured the state government to address the issue but there had been no movement on this front so far.

The CM will also take up the issue of GST waiver on langar and prasad. He had written to Jaitley about the issue a few days ago.

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