Punjab to dig into its devp funds for debt waiver

PLAN TO USE RURAL DEVELOPMENT FUNDS AND MARKET FEE CHARGED ON SALE OF AGRI PRODUCE TO FACILITATE DEBT WAIVER OKAYED

CHANDIGARH: After having failed to get its borrowing limit increased from the Centre, the Punjab government on Monday decided to tap into its resources and use rural development fund and market fee charged on sale of agriculture produce (approximately ₹36,000 crore per annum) to fulfil its debt-waiver promise.

To do so, the government will amend the rural development Act-1987 and the agriculture produce markets Act-1961. This was decided at a cabinet meeting chaired by chief minister Capt Amarinder Singh.

In June, Amarinder had announced to waive off the loans of as many as 10.5 lakh farmers. He announced a total waiver of crop loans up to ₹2 lakh of small and marginal farmers, and a flat ₹2 lakh relief for all marginal farmers, irrespective of the loan amount.

The waiver is likely to cost the state government around ₹10,000 crore.

“The amendments (cleared by the cabinet) would give us the headroom to borrow also (to facilitate the waiver),” said finance minister Manpreet Singh Badal after the meeting.

The rural development board collects funds through 152 market committees across the state. Market fee is collected by these committees on behalf of the mandi board. Both boards have high liquidity —₹1,000 each in their coffers.

The state government also plans to pledge the future receipts to raise loans for debt waiver.

To fulfil its debt promise, the government had earlier unsuccessfully tried to get its current borrowing limit of ₹12,819 crore increased from the Union finance ministry.

The Congress is now feeling pressure from the farmers’ community for inability to implement the waiver announcement made four months ago. “One month is an outer limit, and by that time, we would be able to waive off the debt as promised to the farmers by our government,” Manpreet said.