CHANDIGARH, January 19: Alarmed over the precarious financial situation in Punjab coupled with the wanton borrowings by the Akali-BJP government, the Punjab Pradesh Congress Committee has sought intervention of the Prime Minister Dr Manmohan Singh to issue suitable instructions to the banks to carry out detailed scrutiny before any loans are sanctioned to any public sector enterprise in the state.
In a letter to the Prime Minister, PCC President Capt Amarinder Singh said, “the public enterprises are being used as a window to raise loans from banks and financial institutions for even meeting the day to day expenditure of the state government as its revenues fall short of all the committed expenditure on salaries, pension and interest repayment on loans”.
The PCC President said, “in complete defiance of the thirteenth Finance Commission recommendations by bypassing the legislature and the audit jurisdiction of the Comptroller and Auditor General of India, the present (Akali-BJP) government was on a borrowing spree from some public sector and other banks for funding dubious projects based on arbitrary decisions”.
He stated, apart from these loans being utilized for purposes other than they are raised for it also raises an important question of eating up a substantial part of state’s future revenues. Besides, through this strategy the state government is trying to steer clear of the legislative oversight and audit by the CAG, he pointed out.
Capt Amarinder said, “state government guaranteed SLR (statutory liquidity ratio) bonds issued by the Punjab Infrastructure Development Board (PIDB) to the tune of Rs 1500 crores in various tranches and the recent proposal of the state government to borrow Rs 1100 crores from the SBI by escrowing the proceeds of the proposed 20 per cent surcharge on VAT”.
The PCC President pointed out, contrary to what it has been doing with the money now, the PIDB while issuing the bonds had stated that the funds were being raised primarily for utilization for construction of expressway at Lalru-Baddi and Mohali-Phagwara. “We understand while these projects have been abandoned, the funds raised are being squandered on small scattered projects, including the announcements made by the Chief Minister during his sangat darshan programmes”, he said, while adding, “this is in complete breach of the conditions on which the bonds were issued and subscribed to the subscribers”.
The letter said, the bonds are apparently to be serviced and redeemed from the future proceeds of the “infrastructure fee” levied on food grains and petrol accruing to PIDB. However, he pointed out, levy of this fee itself is facing a legal challenge in the Supreme Court of India and this revenue stream will dry up in the event of the fee being struck down.
In another case, Capt Amarinder said, “the government of Punjab has taken another decision to create the Punjab Municipal Infrastructure Development Corporation (PMIDC) solely with an eye on raising a loan of Rs 1100 crores from the State Bank of India for distributing the money to various municipalities for projects of dubious nature. The loan, he said, is proposed be serviced and repaid by levying a 20 per cent surcharge on VAT and escrowing future receivables there from.
