57% of loans raised used on repaying interest: Mann tells governor

57% of loans raised used on repaying interest: Mann tells governor
Chandigarh: Punjab’s AAP government has raised loans worth Rs 47,107 crore in the first 18 months of its rule in the state. Of this, over 57 per cent had been used only to repay the interest on loans inherited by the AAP government from the previous state governments.

This is the gist of the letter sent by Chief Minister Bhagwant Mann to Governor Banwarilal Purohit on Tuesday, in response to the latter’s query about the state debt having increased by Rs 50,000 crore during the AAP rule.

The Governor had sought the information on September 22.

The letter, sent on Tuesday, a copy of which is with The Tribune, reiterates the request made by Mann to the governor to take up the state’s issue of non-release of Rural Development Fund with the Prime Minister and seeks a moratorium on debt repayment of the state for at least five years. “I am grateful that you have sought this information which allows me to put things in perspective,” the CM said in the letter.

He said that from April 2022 to August 2023, the net addition to the state’s debt had been Rs 47,107.6 crore, which included not only market loans but also loans from NABARD, Externally Aided Project loans allowed by the Centre and long-term loan under Special Assistance for Creation of Capital Assets as permitted by the Centre.

“During my tenure as chief minister, lingering issues left behind by previous governments were dealt on priority. We have used both debt and our own revenue resources to fund organisations/schemes ignored by my predecessors, utilised the new debt to create capital assets and undertake development.

Mann, in the letter, while referring to the government as “your government”, said he is committed to honouring the state’s rightful liabilities and servicing the debt in a timely manner.

“While I strive to mobilise resources to fund development of the state, the government is working 24×7 to mobilise additional resources for the state which is evident from the major revenue receipt heads. These additional receipts have helped immensely in making value accretive investments while initiating payment of arrears and unpaid dues including but not limited to the implementation of sixth pay commission, UGC scales, power subsidy arrears to PSPCL, payment of arrears of atta-dal scheme, arrears of sugarcane farmers, payment of unpaid Central Sponsored Schemes, bailout of entities like PUNSUP, Punjab State Cooperative Agricultural Development Bank Limited, Rural Development Board, etc. I am happy to share that your government has invested in the Sinking Fund a total of Rs 4,000 crore since April 1, 2022, while the total accumulation by previous governments just stood at Rs 2,988 crore. This fund is aimed at alleviating some of the debt pressure of the state in future,” he said.