In debt trap,state begs finance panel for bailout

The debt relief package to be sought by the UP government includes lowering of interest rates on the loans taken by the state government from small savings,and rescheduling of the loan from the market borrowings and from government of India (GOI) .

The total outstanding loan UP has taken from the GOI till March,2005 is Rs 21,276 crore. If the panel accepts the demand to reschedule the payment of principal and interest,the state will get a relief of Rs 2,117 crore.

The total loan from market borrowing,GOI and small saving on UP government is Rs 31,505 crore,to be repaid by March,2015,which is also the award period of the 13th Finance Commission.

The burden will further increase if interest is added to this amount.

In its memorandum to the Finance Commission,the UP government has said this will affect the fiscal situation and may result in fiscal imbalance. Also,it pleaded that the revenue budget of the state government will come under immense pressure as a result of the implementation of the sixth pay panel recommendations.

“The state government would urge the Finance Commission to keep in mind these factors for maintaining a stable and sustainable fiscal environment with equitable growth,” the memorandum said.

The Finance Commission team currently in the state capital includes its chairman Vijay Kelkar and four members,besides senior officials and assistants. The members of the Commission are BK Chaturvedi,Dr Indra Rajaram,Prof Atul Sharma and Dr Sanjiv Mishra.

The proceedings of the Commission will begin here at 10 am on Wednesday,with an address by Chief Minister Mayawati,who will place her state’s demands before the panel,to be followed by Kelkar’s address.

The Commission will also meet the elected representatives of the urban local bodies and panchayati raj institutions,besides representatives form the trade and industry chambers like the CII,PHD Chambers of Commerce,IIA and Associate Chambers of Commerce. Later in the day,the commission will meet the state presidents of nine political parties. On Thursday morning,two teams of the Commission will leave for Lalitpur and Varanasi for field visits.

Mayawati has invited state presidents of the BSP,Samajwadi Party,Congress,BJP,Rashtriya Lok Dal,CPM,CPI,Rashtriya Janata Dal and Nationalist Congress Party for the session.

Oppn gets penny-wise
Meanwhile,the opposition parties in UP geared up with their own set of demands.

Delegations from the SP,BJP and Congress will meet the Finance Commission to voice their apprehensions about the possible diversion of funds for activities like the construction of parks,memorials and statues.

The SP delegation will be led by leader of the Opposition in the state Assembly Shivpal Singh Yadav,while the BJP team will comprise Legislature party leader Om Prakash Singh and spokesperson H N Dikshit.

The Congress delegation will be led by state party president Rita Bahuguna Joshi and Legislature party leader Pramod Tiwari.

Tiwari said the party would seek more financial allocation for the state,including special financial package for eastern UP and Bundelkhand. The party would also demand construction of dams in Nepal to check floods in eastern UP,besides solving the drinking water problem in several districts,he said.

The Congress alleged the party was not taken into confidence while the agenda to be discussed before the Commission was finalised and so it would put forth its demands separately before the panel.

“Ideally,an all-party meeting should have been called by the state government before the arrival of the Finance Commission. But since there has been no dialogue between the state government and other political parties,we have formed our own agenda to be placed before the Commission,” Tiwari said.

“We will ask the Commission to consider the population of UP as per the 2001 census and not the one in 1971,” the CLP leader said,adding he will also ask the panel to set strict guidelines for planned expenditure.