Bhagwant Mann shares debt details with Gov: ‘press PM for 5-yr moratorium on loan repayment’

Mann had last month urged the Governor to take up the issue of the pending Rural Development Fund (RDF), amounting to Rs 5,637.40 crore, with the President and the Prime Minister. In his reply, Purohit had said he learnt that the debt of Punjab rose by about Rs 50,000 crore during the AAP regime and sought details of utilisation of this “huge amount” so that he could “convince the prime minister that the money was properly utilised”. Mann again raised the issue of the pending RDF in his letter to Governor.

“With Punjab’s interests in mind, I would urge you to convince the Prime Minister to not only release the pending RDF but also accord a moratorium on debt repayment of the state for at least five years. This will provide much-needed relief to the strained financial position of the state and would give some fiscal elbow room to your government to accelerate the growth of revenue and the pace of development,” the CM said.

In December last year, three noted economists from Punjab had written to Union Finance Minister Nirmala Sitharaman seeking a moratorium on the border state’s debt for seven years. However, the AAP government had then rejected the idea asserting that the state was not in favour of such a moratorium.

Mann said that during his tenure as chief minister, “lingering issues left behind by previous governments” were dealt with on priority.

“We used both debt and our own revenue resources to fund organisations or schemes ignored by my predecessors, utilised the new debt to create capital assets and undertake development activities in the state,” Mann wrote.
Sharing the details, Mann wrote that his government had to handle the legacy debt of PUNSUP (Rs 350 crore), Punjab’s Cooperative Bank (Rs 798 crore), repayment of loan against Rural Development Fund (Rs 845 crore), Power subsidy arrears (Rs 2,556 crore), sinking fund investment (Rs 4,000 crore), arrears of sugarcane farmers (Rs 1,008 crore), unpaid central sponsored schemes (Rs 1,750 crore). Also, it spent Rs 10,208 crore on development as capital expenditure.

Stating that he was grateful to Governor for seeking details of the expenditure, Mann said it allows him “to put many things in perspective.”

“I want to inform you that from April 1, 2022 to August 31, 2023, the net addition to the state’s debt has been Rs 47,107.6 Crore, which includes not only market loans but also loans from NABARD, externally aided project loans allowed by the Government of India and long-term loan under Special Assistance for Creation of Capital Assets as permitted by Government of India,” Mann wrote.

He further wrote: “ I am committed to honour State’s rightful liabilities and servicing the debt in a timely manner while I strive to mobilise resources to fund development. Our government is working 24X7 to mobilise additional resources which is evident from the major revenue receipt heads”.

As per the data shared given by Mann, his government recorded an increase in the receipts. These included a growth of Rs 2,586 crore in GST in 2022-23 (Rs 18,128 crore ) compared to 2021-22 (Rs 15,542 crore), and excise collections (Rs 8463 crore in 2022-23, compared to Rs 6,157 crore in 2021-22). Similarly, collection through taxes on vehicles went up by Rs 315 crore and on stamps and registration by Rs 919 crore.

The CM said the additional receipts have helped immensely in making value accretive investments while initiating payment of arrears and unpaid dues including, but not limited to, the implementation of sixth pay commission, UGC scale, power subsidy arrears to PSPCL, payment of arrears of atta-dal scheme, arrears of sugarcane farmers, payment of unpaid Central Sponsored Schemes, bailout of entities like PUNSUP, Punjab State Cooperative Agricultural Development Bank Limited (PSCADB), Rural Development Board etc.

“I am happy to share that your Government has invested in the sinking fund a total of Rs 4,000 crore since April 1, 2022 while total accumulation by previous governments just stood at Rs 2,988 crore. This fund is aimed at alleviating some of the debt pressure of the state in future,” he wrote.

“I hope that above information puts into perspective the challenges faced by your Government due to legacy debt burden and I believe that you would be in a position to convince the Hon’ble Prime Minister that not only the debt has been properly utilised but all-out efforts are being made to consolidate the State finances. All this has been done while providing employment to more than 36,000 youth,” he added.

Later, speaking to reporters in Chamkaur Sahib in Rupnagar, Mann said he has given an account of each penny spent to the Governor.