Punjab seeks special fiscal assistance from Planning Commission

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New Delhi, Dec 19 (UNI) Punjab today urged the Planning Commission for special assistance in view of its depleted natural resources of water and soil in order to meet the foodgrain requirements of the country and also as a land-locked State with a hostile international border, the opportunities for external investment in industry and services were limited.

Speaking at the 54th meeting of the National Development Council (NDC), Punjab Chief Minister Parkash Singh Badal expressed grave concern as the economy of Punjab had been consistently growing at a rate lower than the national average for over two decades now due to stagnation in agriculture and prolonged militancy.

He said the State had resorted to heavy market borrowings to fund its development process. The outstanding debt at the end of 2006-07 was Rs 48,344 crore and the interest payment outgo was more than Rs 4000 crore per annum.

Mr Badal suggested that the NDC should devise a suitable policy package for the states with growth rate lower than the All India average growth rate, more so for Punjab which continued to contribute to national food security even during the years of insurgency.

The State's situation was not likely to improve as the implementation of the recommendations of the State Pay Commission in 2008-09 with effect from January 1, 2006 will further deteriorate the fiscal health of the state, he added.

From 2008-09, the State was not likely to receive any non-plan revenue deficit grants which would only aggravate the situation further.

The Chief Minister urged the Centre to provide a bridging financial package to Punjab for two years till such time that the recommendations of the 13th Finance Commission take effect when the Commission is expected to enhance its share.

Mr Badal pointed out the country's three major issues of food and nutrition security, poor economy and small and marginal farmers and heavy indebtedness needed to be addressed immediately which is a result of poor farm incomes.

The Minimum Support Price (MSP) of food crops was not fixed in realistic terms taking cost of production into account. Neither was MSP linked to the consumper price index.

Mr Badal suggested to accept and implement the recommendations of Dr M S Swaminathan, under which the MSP should be equal to the cost of production plus 50 per cent. Moreover, the people engaged in agricultural activities were not categorised as skilled workers.

He further suggested for the creation of an Agriculture Development Fund (ADF) to be financed through a payment of additional sum of Rs 100 per quintal of paddy and wheat procurred in the State which should be used to reclaim/improve the soil, recharge ground water, develop infrastructure for adoption of high value enterprises, improve marketing and processing besides rejuvenation of irrigation network in the State.

Punjab had already put into place the Participatory Irrigation Management (PIM) where farmers had been entrusted with the work of management of distribution of water in the area earmarked for supply of water at the outlet head and maintenance of field channels at their own cost, Mr Badal informed.

On the Power front, Mr Badal said the present generation capacity of Punjab was 6200 MW, against the peak demand of 9000 MW, a shortfall of 30 per cent of peak demand. By the end of the 11th Five-Year-Plan, the estimated peak demand was likely to rise to around 11000 MW, a deficit of around 5000 MW.

In order to meet the shortfall, the State Government has drawn a comprehensive programme of generation capacity addition of around 5100 MW.

The State had also been allocated 2225 MW of Power from five Ultra Mega Power Projects situated in various parts of the country, he added.

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