'Punjab could have boosted infra had CCL debt account not been there': State FM

Punjab could have built three medical colleges, two industrial parks, two 4-lane highways, a 100-bedded hospital, among other infrastructure-related projects with Rs 10,530 crore that was paid for debt servicing of the cash credit limit debt account of Rs 30,000 crore, inherited from previous SAD-BJP government.

Finance Minister Manpreet Singh Badal who presented his state budget for 2020-21 on Friday informed the state assembly that the state would pay whopping Rs 10,530 crore on account of servicing of the long term the cash credit limit (CCL) debt account by March 2020, while blaming the previous government for creating the debt of Rs 30,000 crore.          

“The state can visualise how much development we could have done if the previous government had not left us this legacy,” said Badal in the House.          

He said with Rs 10,530 crore, the government could have built two four-lane highways, three medical colleges, a 100-bedded hospital, senior secondary school, ITI in each constituency, two 500-acre industrial parks and a Rs 1,000 crore dedicated corpus fund for farm research.          

“This (Rs 10,530 crore) is only one sixth of the total burden of Rs 57,358 crore that each Punjabi will have to discharge till September 2034,” he said. “Just imagine, six times of the above infrastructure that we could have created had this deal not been signed by the previous government. Just calculate the economic multiplier effect of this huge capital investment that could have happened,” he said.        

The legacy debt of Rs 30,000 crore was created by the erstwhile SAD-BJP government which, in the last leg of its tenure in 2017, had persuaded the Centre to convert the CCL gap into a clean long term loan for the state.

The debt servicing of this amount would alone amount to Rs 3,240 crore per annum till September 2034. This will result in a total outflow of Rs 57,358 crore during the repayment tenure of the loan.

The CCL debt account arose because of the mismatch between cash credit availed for procuring wheat and paddy and foodgrain stocks in the account books of the state procurement agencies since 2004.

The Rs 31,000 crore included Rs 12,000 crore principal and Rs 19,000 crore interest and Punjab has been paying Rs 3,240 crore interest per annum on it which it has to pay for 20 years.

(Image credit: PTI)