Arunachal benefits from Debt Relief Scheme

Itanagar, Aug 18 (UNI) The Fiscal Responsibility and Budget Management (FRBM) Act, 2006, has been passed by the Arunachal Pradesh State Legislative Assembly to avail the benefit of Debt Relief Scheme as recommended by the 12th Finance Commission (TPC).

Official sources here today said under the general Debt Relief Scheme, all central loans of the Finance Ministry to the state, contracted till March 31, 2004 and those outstanding on March 31, 2005, had been consolidated into a fresh loan.

The interest rate thereon had been lowered to 7.5 per cent and rescheduled for a uniform tenure of 20 years, the sources added.

If Arunachal Pradesh performed well as per the guidelines of the Debt Relief Scheme, the state would benefit by Rs 91.71 crore during a five-year period of 2005-2010, sources informed.

The central loans of the Finance Ministry would be written off each year from 2005-06 onwards, as long as the revenue surplus of the state did not go below the base year of 2003-04 level under the Debt Write-Off Scheme.

However, if in any year, the fiscal deficit exceeded this level, the benefit of write-off, even if eligible otherwise, would not be given.

The potential benefit could be Rs 97.39 crore as write-off of loan, official sources added.

The Arunachal Pradesh government had been able to take the benefit of both debt relief and Debt Write-Off Scheme since 2006-07.

On the basis of fulfillment of criteria in the current fiscal, the state could be expected to benefit further during 2008-09, sources added.

UNI