NEW DELHI: The Center is understood to have indicated’ to the Punjab Government that it will Not provide any assistance to the State from the next year onwards to maintain law and order. Till now, it was providing Rs 600 crore annually for this purpose.
Not only this, the Center has decided to demand the Rs 6,200 crore advanced as “‘on this count during the past 10 years.
‘According to informed sources, the Beant Singh government will suffer another blow with the Center’s decision to stop this aid completely. It has also conveyed to Punjab that it should mobile: its own resources to handle fancy.
It may be recalled that Punjab’s ant militancy efforts were being financed by the Center in “national interest.”
‘While the Punjab government has been pleading with the Center oat feast soften the repayment terms, ‘of this special aid if not waive off the entire amount, the Rao government has come out with a new direction throwing the entire financial management of the state out of gear.
The Punjab government has been spending at least Rs 600 crore, annually on the activities of Punjab Police and paramilitary forces. The Center has till now provided nearly Rs 6,200 crore during the past 10 years to Punjab to tide over unprecedented militancy aided’ and abetted’ from across the border. Now that the insurgency is under control and Punjab is on the path of progress, the Center has started pressing for the repayment of the Rs 6,200 crore with compound interest, In addition to the repayment of this loan, the Center has now conveyed the state government that the Rs 600 crore special assistance will not be forthcoming from 199495 onwards.
When the Punjab Chief Minister received the signal from the Center about stoppage of this special assistance from next year onwards and the center’s SOS on repayment of Rs 6,200 crore with a compound rate of interest, he reportedly rushed to Delhi to sort out the issue. Senior state government officials say the Chief Minister met the Prime Minister and submitted that this would be a serious blow to the development projects underway in the state. If the Center continued with its virtually anti Punjab policy, it would strengthen the hands of his detractors within and outside the Congress party. Beant Singh said that ever since the return of democracy in Punjab, the Center had not given any concession to the state, The Akalis had been gaining ground in the State largely because the Center was merely making promises and had given nothing to the state. He reportedly told the Prime Minister that the situation would deteriorate in the state if adequate care ‘was not taken at this stage.
‘The Prime Minister reportedly. Assured him that steps would be taken to generate confidence and the people would get what they ‘expected, He told the Chief Minister to get in touch with the Finance Commission Chairman, K.C. Pant. The terms and reference of the 10th Finance Commission include a clause about special assistance to those states which are fighting militancy and facing other such problems. Beant Singh is said to have later led a delegation to Pant who assured him that the demand of the state government would be sympathetically considered. The issue would be taken up once again after the assembly elections in southern states. Meanwhile, the Punjab government has said that it was willing to repay the loan with interest but the modalities should be redrafted. At present, the Center was charging Rs 825 crore per year from Punjab against its outstanding loan of Rs 6,200 crore plus interest. The state government wants to repay the principal amount first with the annual amount not exceeding Rs 300 crore. The interest should be charged only after principal amount is repaid, it has contended. The Finance Ministry has not yet replied to the proposal of the Punjab government in this regard.
Article extracted from this publication >> November 25, 1994
