Punjab chief minister Parkash Singh Badal on Tuesday said that he along with MPs from the state would soon call on the prime minister and the finance minister to seek their intervention for waiving of the outstanding small savings loan of Rs 22,202 crore as on March 31.
Badal also asked the Centre to grant moratorium of repayment of principal and interest on the loan for five years from the current fiscal.
In separate letters to Prime Minister Manmohan Singh and finance minister Pranab Mukherjee, Badal apprised them that Punjab was a revenue surplus state till 1986-87. State finances were adversely affected during the long period of militancy and President's rule, an official release said.
While the state had to incur heavy expenditure on security, little efforts were made to mobilise additional resources.
Even the industry didn't find the border state with a hostile neighbour an attractive destination for investment, he said.
Besides, the tax concessions to neighbouring states in 2000-01 rendered the manufacturing sector totally uncompetitive, he added.
The state had ruined its soil and water resources and was incurring heavy expenditure on power in order to ensure national food security, Badal said.
He added that the 13th Finance Commission identified the three states of West Bengal, Punjab and Kerala, which were revenue deficit in the financial year 2007-08 as debt-stressed.
Subsequently, the Union government constituted a committee under the chairmanship of its expenditure secretary. The committee held three meetings, two in August 2010 and 3rd in November 2011. However, the committee is yet to submit its report.
The state has an outstanding debt of Rs 77,585 crore as on March 31, 2012. The annual interest liability was about Rs 6,500 crore.
The 13th Finance Commission had recommended only minor interest relief of resetting the rate of interest at 9% on small savings loan and waiver of outstanding loans of Rs 90 crore granted by various central ministries other than ministry of finance, he added.
The state had already amended its financial responsibility and budget management (FRBM) Act to make it consistent with fiscal consolidation roadmap recommended by the commission.
However, the state is finding it extremely difficult to meet these targets, Badal added.