Amarinder announces loan waiver bonanza for farmers
Small and marginal farmers with loans up to ₹2 lakh biggest beneficiaries; plan doesn’t cover loans extended by arhtiyas
CHANDIGARH: Punjab chief minister Capt Amarinder Singh on Monday announced a total waiver of crop loans up to ₹ 2 lakh of small and marginal farmers(owning up to 5 acres), and a flat ₹2 lakh relief for all marginal farmers, irrespective of the loan amount.
The chief minister’s announcement covers cooperative loans, not loans taken by farmers from arhtiyas (private money lenders). A total of 10.25 lakh farmers are expected to benefit from the loan write-off involving a liability of ₹20,500 crore. He also announced a waiver of ₹ 50,000 for scheduled caste farmers irrespective of land holdings.
Amarinder, who made the announcement while replying to a discussion on the governor’s address, said the roadmap for waiver and total funds required would be announced by the finance minister in his budgetary proposals. “The waiver will provide double the relief announced by the states of Uttar Pradesh and Maharashtra,” he said.
The announcement is based on an interim report submitted by an expert group headed by Dr T Haque, former chairman of Commission for Agricultural Costs and Prices (CACP), set up in April 2017 to assess the quantum of debt and ways and means for its waiver. The loan-waiver promise was part of the Congress manifesto released during the assembly polls.
The CM announced to waive the entire loan of families of farmers who committed suicide in the state, besides increasing the ex gratia for suicide-affected families to ₹ 5 lakh from the existing ₹ 3 lakh.
GIVE UP POWER SUBSIDY, CM TO RICH FARMERS
Amarinder Singh, while reiterating that the free power subsidy would continue, asked the well to do farmers to give up their subsidy voluntarily.
CHANDIGARH: In a scathing indictment of fiscal management during the Akali-BJP rule of 10 years, the Congress government, in a white paper tabled in the assembly on Monday, said the state is in the “tight grip of a debt trap” and its finances in a “free fall”.
Painting a grim picture a day before the first budget of the new government, the white paper on state finances – one of the two tabled by finance minister Manpreet Singh Badal – blamed lack of fiscal prudence and indiscriminate raising of loans, especially unproductive borrowings and ‘book-cooking’, for the debt trap.
As an almost empty state treasury is a huge worry for Capt Amarinder Singh-led government, the white paper has political undertones, indicating how much to expect from the budget.
The paper puts the outstanding debt, power bonds, loans of state entities and loan to cover cash credit limit gap at ₹1.87-lakh crore, as on March 31, 2017. If the state guarantees are added, it jumps to ₹2.08-lakh crore.
“The state finances are in a free fall, as the government revenue has not kept pace with its expenditure, leading to ballooning revenue and fiscal deficits,” reads the 143-page white paper, summarising the fiscal woes. “A high percentage of expenditure is already committed, leaving hardly any fiscal space. It is inflicted with structural imbalance and, if no corrective measures are taken, it will take a heavy toll on the future development of the state.”
EMPTY TREASURY WORRIES CAPT GOVT
The paper notes that apart from meeting the day-to-day challenge of keeping the treasury afloat for the routine administrative expenditure, the state is constantly facing grave paucity of resources for financing the capital expenditure. “The situation is alarming.”
The Congress came to power with the promise of farm debt
waiver, unemployment allowance, mobile phones, jobs and a lot of other cash-guzzling freebies.
While chief minister Capt Amarinder Singh announced debt write-off after the two white papers were tabled, his government lacks the financial wiggle
room to implement most of its promises and is expected to stagger them.
In the past, too, the governments in states of Haryana, Tamil Nadu, Maharashtra and Kerala have presented white papers to bring out fiscal mismanagement of their predecessors
and to defer or stagger implementation of their promises.
REVENUES MORTGAGED, PROPERTIES PLEDGED
Another disturbing feature of fiscal management was the Akali-BJP regime’s penchant for abusing government entities — such as Punjab Infrastructure Development Board (PIDB), Rural Development Board (RDB) and Punjab Urban Development Authority (PUDA) — to indiscriminately raise loans by mortgaging their future revenues or by hypothecating immovable properties at their disposal.
The three undertakings raised loans to the tune of ₹12,643 crore. A part of this debt also flowed into the state treasury as “informal debt”, which stands at ₹4,435 crore.
“Raising loans in this manner is nothing short of selling the family silver to run your kitchen. They provided a handy window to fund the populist programmes of the then ruling dispensation,” the white paper points out.
The loans were raised as an off-budget exercise and totally escaped due scrutiny, legislative approval and audit by the Comptroller and Auditor General (CAG) . The government has hinted at carrying out a special audit to ascertain whether the loans were properly accounted for and utilised in accordance with their statutory mandate.
GROWTH BELOW ALL-INDIA AVERAGE
The state’s financial decline, according to the paper, has seamlessly merged into its economic decline, making it one of the slow growing states of the country.
During the last 10 years, the growth rate of Punjab remained lower than the all-India average, except in 2013-14, when it was slightly higher. The growth rate was as low as 4.2% against 7.5% at all-India level in 2014-15.
The average growth of the Gross State Domestic Product (GSDP) recorded from 2006-07 to 2015-16 was 6.37%, which was lower than the average growth recorded by Goa (10.68%), Bihar (10.08%), Gujarat (9.70%), Madhya Pradesh (8.54%), Haryana (8.30%), Maharashtra (7.71%) and Tamil Nadu (7.66%). Also, the state, which held the top position in per capita income for a long time, has slid to the seventh position among the major states.