Arunachal issues white paper on outstanding debts

Itanagar, Aug 16 (UNI) The Dorjee Khandu government in Arunachal Pradesh has issued a white paper on outstanding debt and debt servicing liabilities amounting to Rs 2,336.40 crore as on March 31 this year.

As per the document, which was made public during Independence Day celebration here yesterday, the total amount of central government debt is at Rs 463.62 crore, while internal debt including market borrowings and small savings loans from national small savings funds amount to Rs 1,340.86 crore and liability of general provident fund and employees group insurance fund amount to Rs 531 crore.

During the financial year 2006-07, an amount of Rs 341.23 crore was incurred by the state on debt servicing which include Rs 128.78 crore as principal and Rs 212.45 crore as interest.

The Twelfth Finance Commission (TFC), covering the award period of five years (2005-10), has recommended debt relief schemes (DRS) which include general debt relief scheme applicable to all states, which would enact fiscal responsibility legislation (FRL) and a debt write-off (waiver) scheme linked to fiscal performance of the state.

With a view to avail the benefit of DRS, the Fiscal Responsibility and Budget Management (FRBM) Act, 2006 was passed by the state assembly, the document said. Under the scheme all central loans contracted till March 31, 2004, and those outstanding on March 31, 2005, have been consolidated into a fresh loan and the interest rate has been lowered to 7.5 per cent and rescheduled for a uniform tenure of 20 years, it added.

Under the DRS if the state performs as per the guidelines, the government would get benefit of Rs 91.71 crore (Rs 19.98 crore as relief in terms of lower repayment of principal due to re-schedulement and Rs 71.73 crore as relief in payment of interest) during the five year period (2005-10) Under the debt write-off scheme, the installments of repayment due on the central loans would be written off in each year from 2005-06 onwards, so long as the revenue surplus of the state does not go below the base year 2003-04 level in absolute terms in the years 2005-06 to 2008-09 and onwards. Besdies, the fiscal deficit of the state being controlled at the level of 2004-05 and the fiscal deficit should not be more that three per cent of GSDP by 2008-09, if in any year, the fiscal deficit exceed the level, the benefit of write-off, even if eligible otherwise, would not be given.

The state has been able to take the benefit of both debt relief and debt write-off schemes since 2005-06 and would be getting the benefit this year too on the basis of fulfillment of criteria during last year. It would also get the benefit during 2008-09 on the basis of fulfillment of criteria in the current fiscal, it added.

UNI