*DEMANDS IMMEDIATE IMPLEMENTATION OF RECOMMENDATIONS OF SECRETARY FINANCE COMMITTEE
*TO BAIL OUT THREE DEBT STRESSED STATES OF PUNJAB, KERALA AND WEST BENGAL
New Delhi – Punjab Finance Minister Dr. Upinderjit Kaur today strongly pleaded for the complete waiver of the entire loan of Rs. 23,146 crore outstanding at the end of 2010-11 and sought the immediate implementation of the recommendations of Secretary Finance committee which was constituted to explore the ways to assist the three debt stressed states of Kerala, Punjab and West Bengal in getting out of current fiscal stress.
Taking part in the deliberations during the National Development Council at Vigyan Bhawan New Delhi, Dr. Kaur vehemently advocated for one time complete debt waiver as the Punjab was passing through a phase of fiscal stress due to huge debt and the total accumulated debt was of Rs.64,924 crore mainly due to decade long militancy and Pay Commission recommendations.
The Finance Minister said that the policy planners were well aware of the facts that state continued to endure the effects of the long period of militancy. "The land locked geographical location coupled with an active border are certain disincentives for which the Punjab deserves to be adequately compensated", she asserted. Dr. Kaur pointed out that country witnessed an average growth rate of 8.2% against the target of 9% during the 11th plan on the other hand the Punjab state’s average growth was 7.85% against the target of 5.9%.
Dr.Upinderjit Kaur stated that the approach paper envisages 9% rate of growth during the 12th plan and it was not difficult to achieve. "However, it would require a massive effort at improving infrastructure, stepping up rate of savings, investment and improvement in human capital and its productivity", she remarked.
Highlighting the paucity of resources and inadequate support from GoI had compelled the state government to resort to heavy borrowings, Dr. Kaur lamented that the state share from the central taxes has come down from 2.45% as recommended by the 5th Finance Commission to 1.39% subsequently recommended by 13th Finance Commission. Demanding to enhance the borrowing limit, she urged to work out this limit by taking into account full repayment of principal amount.
Emphasizing that animal husbandry has a lot of potential for boosting the income of farmers the Minister urged that Union Government must treat animal husbandry at par with cropping sector for accessing credit at a lower rate of interest and exemption from income tax. She urged to provide one time grant of Rs. 100 crore to the newly set up Punjab Veterinary University of Animal Sciences for boosting research and dissemination of technologies.
Raising an issue of diminishing returns to the farmers, Dr. Kaur pointed out that the decline in real farm incomes has led to rising rural debts which were estimated to 35000 crore in the state and urged the GoI to fix minimum support price (MSP) realistically by providing a margin of 50% over the cost of production as suggested by the National Commission on Farmers. She impressed upon to waive all agricultural loans as a one time measure in the state as Punjab farmers did not benefited much from the debt waiver scheme announced by GoI two years back because there were few defaulters in the state.
The Finance Minister further briefed that farmers in 6 border districts were earlier getting compensation at Rs 2000 per acre for their cultivable land measuring approximately 18,500 acres situated across the barbed fence but it was stopped in the year 2000 causing lot of resentment among the peasantry. Upinderjit Kaur stressed upon to restore and enhance compensation to Rs 10,000 per acre to these farmers as it was being given on account of various restrictions on cultivation of land.
Dr Upinderjit Kaur revealed that Gadgil/Mukerjee Formula of 1991 does not take into account SC population in the state and performance in terms of contribution of food grains to national pool as these two parameters are extremely important. She demanded that the weightage of 60% of population should be split up into two parts–weightage of 40% to total population and 20% to SC population. Similarly, the weightage for per capita income should be reduced from 25% to 15% and this 10% weightage be given to contribution of food grains to the national pool.
Ridiculing the present central road fund (CRF) scheme she emphasised that the Punjab contributes about Rs. 600 crore every year in terms of levy of cess of Rs. 1.5 per litre on diesel and petrol to CRF but GoI has altered the formula of allocation of funds under the scheme to the disadvantage of the state. The Finance Minister demanded that the earlier ratio of weightage to area of the state and fuel consumption which has been changed from 40:60 to 70:30 should be restored to 40:60.
Emphasizing the need to alter the criteria for allocation of funds under flagship schemes Finance Minister demanded that the Punjab needs to be compensated by making provision for maintenance and up-gradation of infrastructure under the centrally sponsored schemes that were not favourable for the states like Punjab which have developed the requisite infrastructure in relevant areas from their own resources.
She impressed upon the GoI to reconsider recent State Disaster Relief Fund/CRF policy and demanded that balance amount at the end of five year plan period should be made available to the states as a resource for funding the next year.
Conceding the introduction of Goods and Services Tax (GST) in the country, the Finance Minister cautioned that the purchase tax on food grains should not be subsumed in the proposed goods and services tax and it should be kept out of the purview of GST.
Dr. Kaur said that the Punjab is a major contributor of food grains to the national pool. However, it had been at a huge cost in terms of depleted water table and degradation of soils in the state. "Punjab needs to break out from the rice wheat cropping cycle. Besides increase of growth in agriculture sector can only come through by diversifying into production of fruits, vegetables and cultivation of pulses, oilseeds, maize etc., she said. Adding further the Finance Minister said the though Minimum Support Price is announced for as many as 25 agriculture commodities yet there is no effective procurement mechanism for the purchase of crops other than wheat and paddy. She underlined that GoI should assist state in creation of the long term, modern and scientific storage capacity in order to mitigate the problem of food storage.
Highlighting the farm crisis in Punjab the Minister demanded that Minimum Support Price should be fixed realistically by providing a margin of 50% over the cost of production as suggested by the National Commission on Farmers. The decline in real farm incomes has led to rising rural debts which are estimated to 35000 crore in the state. The state did not benefit much from the debt waiver scheme announced by GoI two years back because there were few defaulters in the state. We urge GoI to waive all agricultural loans as a one time measure.
She also sought special category status under AIBP (Accelerated Irrigation Benefit Programme), the Minister impressed upon the Centre to include Punjab under this category being major contributor of food grains to central pool, as the special category states were entitled to 90% grant against 25% for no-special category.
Dr. Kaur said that Punjab state would spend Rs. 498 crore for construction of toilet in rural areas. However, still there would be a gap of 7 lac toilet for which Rs. 700 crore is required. Urging the GoI she demanded to give top priority to sanitation in the 12th Five Year Plan and assist the states in construction of toilet for all houses.
Outlining the power scenario she said that the state government would add 4000 MW power capacity by 2014 and it would be a power surplus state. However there are two power projects which have been held up for want of coal linkages. Coal supply to the existing power plants should be ensured and coal linkages for the proposed two power plants of 4800 MW capacity at Gidderbaha and Hazipur be provided. The work on laying of gas pipe line from Dadri in U.P. to Nangal in Punjab should be started and gas should be supplied to the state at administered price for the proposed 1000 MW gas based thermal power plan.
She also informed that Power utilities in Punjab were facing difficulties in raising loans from almost all the nationalized/commercial banks and asked the GoI to intervene in the matter and issue necessary directions to Reserve Bank of India to allow banks to continue their financial support to the power utilities in the state.
Referring to the industrial scenario, Dr. Kaur remarked that abolition of freight equalisation policy for iron and coal, problem of militancy and tax concessions to neighbouring states have rendered the manufacturing sector in the state uncompetitive and urged the GoI to help state in reviving its industries by linking the Delhi – Mumbai Industrial Corridor with Western Freight Corridor and extending it up to Amrtisar; Central Sector Investment in Punjab was limited and there had been no major investments in the state during the last many years except Refinery Project in Bathinda. Government of India should facilitate location of a major project and allocation of one of National Manufacturing Investment Zone in the state, she asserted.
On the education front, she said that the state government has made available 544 acre of land for Central University in Bathinda. However the construction work is yet to begin. Similarly for World Class University near Amritsar, the state government has offered 3 sites and GoI is requested to convey its approval from one of the site and start construction work.
Referring to the progress made in the Health & Family Welfare sector, she demanded the much awaited National Urban Health Mission should be launched for urban areas. GoI should assist the states in up-gradation of district hospitals in a phased manner to Indian Public Health Standards. Similarly all the government medical colleges should be upgraded to address the problem of shortage of doctors and especially the medical specialists. The norm of 5000 population for a sub centre was fixed long back and due to increase in population there is need to set up 700 more sub centres in the state. We welcome the suggestion of Planning Commission to provide sub centre in every village panchayat in the 12th Five year Plan. She also revealed that Punjab has recorded an impressive performance in improvement of child sex ratio from 798 in 2001 to 846 in 2011. It spends about Rs. 75 crore for girl child. The child sex ratio is declining in the majority of the states and GoI should assist them through various schemes for the girl child. Most of the anganwadi centres in the state are running from rented buildings. Government of India is urged to provide financial assistance to the state for the construction of new buildings for the anganwadi centres.
The Finance Minister was accompanied by the Chief Secretary SC Aggrawal, Principal Secretary Finance Mr. KBS Sidhu and Secretary Planning Mr. Satish Chandra.
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