E-Paper
Punjab seeks special rehab package, admits to ₹12k cr SDRF balance
Finance minister Harpal Singh Cheema met Finance Commission chairman Arvind Panagariya in Delhi, and highlighted the stress placed on the border state’s finances, emphasised the immediate need for changes in SDRF norms.
Amid claims and counter-claims over funds in the state’s disaster relief kitty, the Punjab government on Tuesday requested the 16th Finance Commission for a special long-term rehabilitation package for the flood-ravaged state and conversion of the state disaster response fund (SDRF) into a non-interest-bearing reserve. It also admitted a total SDRF fund balance of ₹12,268 crore, including interest accumulation of ₹7,263 crore.
A high-level state delegation comprising finance minister Harpal Singh Cheema, chief secretary KAP Sinha, and additional chief secretary, finance, Alok Shekhar, met 16th Finance Commission chairman Dr Arvind Panagariya in Delhi and presented the case for the package to the state, citing the estimated damage of ₹20,000 crore due to recent floods, according to an official statement.
Cheema, while highlighting the stress placed on the border state’s finances, emphasised the immediate need for changes in SDRF norms.
Calling the existing SDRF norms “restrictive and rigid,” which constrained the state government’s ability to provide timely and adequate relief, he said these guidelines need to be comprehensively reviewed to incorporate flexibility and provisions for state-specific disasters.
The finance minister further stressed that the SDRF must be converted into a non-interest-bearing reserve fund, akin to the national disaster response fund (NDRF), noting that Punjab’s fund currently holds an interest accumulation of ₹7,623 crore out of a total balance of ₹12,268 crore. Panagariya acknowledged the Punjab finance minister’s concern and assured that it would be discussed with the commission members in their upcoming meeting, according to the official release.
Prime Minister Narendra Modi, while announcing a ₹1,600 crore relief package on September 9, had pointed out that ₹12,000 crore was already available in the state’s kitty for disaster relief. His remark triggered a row over the actual size of the state’s kitty for disaster relief. The AAP government claimed that it had received only ₹1,582 crore during its tenure, dismissing the figure mentioned by the Prime Minister as “notional” and mere “entries in account books.” However, the Opposition, including the Congress and the BJP, demanded a probe into what they described as “missing” funds.
The Centre has put the SDRF balance at ₹12,589.59 crore. This figure was conveyed to chief minister Bhagwant Mann during a meeting he had with Union home minister Amit Shah in Delhi on Tuesday. “During the meeting, the chief minister was apprised that in SDRF, the state has sufficient funds to the tune of ₹12,589.59 crore, which can be utilised for the relief and immediate restoration to the affected people as per the Government of India norms,” according to an official spokesperson.
The minister’s delegation also reiterated the demands put forth by Punjab in the last meeting with the 16th Finance Commission, seeking dedicated financial support to states sharing a hostile border. Cheema informed the commission that the heightened tensions with Pakistan, particularly in the wake of ‘Operation Sindoor’ earlier this year, caused massive economic losses to the state’s border districts through repeated disruptions to daily life, industrial activity, and the movement of goods. “Punjab continues to face unique security challenges, including drone incursions, cross-border smuggling, and narco-terrorism, which demand constant, heavy investment in security and law enforcement,” he added.
The commission was also apprised that the state is investing heavily in infrastructure and police modernisation to create an effective second line of defence in support of the Border Security Force (BSF).
Special border area package sought
Cheema requested a dedicated border area package to strengthen police forces and law enforcement infrastructure, for which the state had made a request for ₹2,982 crore in its memorandum to the commission. A special industrial package was also sought for border districts, which consistently lag behind the state average in per capita income due to limited industrial activity caused by border tensions. “The closure of the Wagah border, once a vital trade corridor, has caused estimated losses of ₹5,000 to ₹8,000 crore per annum, further exacerbating the economic setback,” the finance minister added, reiterating the earlier demand.
