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Centre says it made debt-waiver offer to Punjab but silent on the amount

It’s the Union versus the State of Punjab now in the raging debate over Punjab's finances which has claimed the state's former finance minister, Manpreet Badal, as its first casualty. In its November 12 reply to queries raised in the Lok Sabha by three Members of Parliament from Punjab – Harsimrat Kaur Badal and Sher Singh Gubaya of the Shiromani Akali Dal (SAD) and Manish Tewari of the Congress – on the state's debt, the Union finance ministry has stated that Punjab had requested a package to ameliorate its debt burden and it is one of the three states – Kerala and West Bengal are the other two – that were to be assisted to get out of the fiscal stress but has failed to provide a detailed blueprint for the same.

While Tewari had asked whether the Government of Punjab has estimated the extent of debt as on 31 March, 2010 and urged the Union Government to waive it and, if so, whether the Government of Punjab has detailed the obligations that it is willing to undertake in lieu of this waiver, Harsimrat and Gubaya had targeted their question on the figure – has the the Union Government conveyed to the Punjab Government its willingness to waive half of its debt, that is, Rs 35,000 crore of the projected Rs 70,000 crore debt; and if so, the details thereof.

The reply of Union Minister of State for Finance, Namo Narain Meena, states, “Punjab is one of the three general category states identified by the 13th Finance Commission as revenue deficit. The committee recommended, and the Union Government accepted, that the debt-gross state domestic product (GSDP) ratio of these states be brought down to the target of 24.3 per cent by the year 2014-15. Accordingly, a committee was set up to explore ways to assist the three states to get out of their fiscal stress along with measures to be taken by the states to prevent recurrence of such a situation in the future. None of the three states, including Punjab, have provided a blueprint to ameliorate indebtedness and remove structural deficit. Only on receipt of such blueprints can the committee explore ways to assist states.”

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