Rs 3,800 cr borrowed in 6 months

On June 23,July 29 and August 25,the government again borrowed Rs 500 crore each time. On September 22 another Rs 700 crore were borrowed and on October 6 and October 23,Rs 300 crore and Rs 200 crore,respectively,were borrowed.

There has been a gap between revenue generation and expenditure for some time now.

The fiscal deficit has been on the rise and servicing of old debt of close to Rs 50,000 crore has meant an addition of about Rs 5,000 crore per year as interest.

Almost 70 per cent total revenue generation in the state goes against salaries,pensions and other welfare schemes such as atta-dal,shagan scheme,old age,widow pensions and free power.

The revised pay scales by the UGC for university and college teachers has put additional burden on the government.

“It is likely that the Rs 200 crore borrowed recently will have to be used for paying salaries to the state government employees. The salary bill of the state is around Rs 500 crore per month,” said an officer.

The poor fiscal state and need to run the state has resulted in more borrowings.

The state Finance Minister Manpreet Singh Badal has been asking to do away with the subsidies and a two-member committee was formed last month to look into the fiscal situation of the state.

Punjab government officials said borrowings are inevitable in the second half of the year,whether through the market,World Bank or NABARD. A senior functionary of the finance department termed it as normal and said,” It is done so that we can survive. We have borrowed for a period of 5-25 years and the present rate of interest payable is 9-10 percent.”

The state government had written to the Prime Minister and Union Finance Minister in February this year for inter-alia,provision of additional funds and relaxation of borrowing ceilings fixed for 2008-09 under the FRBM Act to tide over the impact of slowdown in the various industrial sectors.