Punjab borrows Rs 1,000 crore to pay September salary | punjab | top | Hindustan Times
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Punjab borrows Rs 1,000 crore to pay September salary

The state runs up a monthly salary bill of Rs 2,000 crore and a pension liability of Rs 650 crore. Of total liability of Rs 2,650 crore, the govt had arranged Rs 1,600 crore from own sources.

punjab Updated: Oct 05, 2017 09:16 IST
Gurpreet Singh Nibber
Of the total liability of Rs 2,650 crore, the govt had arranged Rs 1,600 crore from own sources. Finance department officials claimed the disbursal began on Wednesday.
Of the total liability of Rs 2,650 crore, the govt had arranged Rs 1,600 crore from own sources. Finance department officials claimed the disbursal began on Wednesday. (HT File )

Facing an acute fund crunch due to falling tax receivables, the Punjab government has taken a short-term loan of Rs 1,000 crore to pay salaries and pension of staff in government departments for September. The state runs up a monthly salary bill of Rs 2,000 crore and a pension liability of Rs 650 crore.

Rs 33,000 crore cash credit limit awaited
  • The state government, on Wednesday, said it expected CCL of Rs 33,250 crore for paddy procurement. The season begins on October 1, but the crops have not fully matured this year. Till now, the state’s grain markets and had seen only negligible arrival of paddy.
  • “It’s matter of time now, as we would receive CCL any day. We have already cleared CCL dues of the previous paddy crop,” said principal secretary, food and civil supplies, KAP Sinha. The state agriculture department had pegged total production at 182 lakh tonne and the centre has offered minimum support price of Rs 1,590 per quintal.

Of the total liability of Rs 2,650 crore, the govt had arranged Rs 1,600 crore from own sources. Finance department officials claimed the disbursal began on Wednesday. The state government runs up a similar bill (around Rs 2,650 crore) as monthly instalment on outstanding debt and interest liabilities. The state provides another Rs 670 crore monthly power subsidy for free power to agriculture pumpsets and other consumer sections. Till afternoon, the salary had not been credited to staff accounts.

“This is the Diwali month. We are eagerly awaiting the credit of salary so than we can start our shopping,” said an employee with the state government.

Receipts for July, August fell 20% over last year

The mess is being attributed to fall in receipts of state share of VAT/GST. For July and August last year, the collection was Rs 2,900 crore; this year, the comparable collection of these two months is Rs 2,350 crore. This is a drop of around 20%. Adding to the fund crunch, the state government had to pay Rs 1,100 crore to the State Bank of India (SBI) for settling accounts of the cash credit limit (CCL) of 2016 kharif season (taken for paddy procurement). The Rs 1,100 crore had to be mandatorily paid as failure to clear it might have led the state to not receiving the CCL for current paddy procurement.

Sources in the finance department say with new tax regime of GST coming into effect from July 1, there have been issues with streamlining of the system. Contrary to fall in the GST receivables in first two months, the finance department is expecting collections to increase once the system was streamlined. Till about 2pm, the civil secretariat staff were awaiting credit of salaries into their accounts.

FM downplays issue

Finance minister Manpreet Singh Badal, whom is in Gurdaspur for October 11 bypoll, denied that there was any salary crunch, when quizzed on the hue and cry among government staff for delay in salary. He claimed that the salary had been credited into bank accounts of all the government employees. “The chief minister and the Punjab governor have got their salaries,” Manpreet said, in a lighter vein.