Unprecedented financial crisis has drove Punjab close to an emergency situation where it has shut down all government treasuries in the state and put on hold salary of more than 3.5 lakh employees including all IAS and IPS officers.
Unprecedented financial crisis has drove Punjab close to an emergency situation where it has shut down all government treasuries in the state and put on hold salary of more than 3.5 lakh employees including all IAS and IPS officers.
The state treasury has been directed not to release any payment as the state had already touched an overdraft of Rs200 crores after which the RBI has declined to lend any money to Punjab.
Principal secretary ( finance) Satish Chandra has been camping in Delhi to persuade the Centre to release some of the money due to the state which included Rs500 crores as share in the central taxes and Rs275 crores as returns from the Finance Commission
Doctors and teachers in the state , however, have not been paid salaries for the last two months which amp;y explains the crisis that the state's fiscal health has been in.
Sources said payments worth rs 2500 crores had been put on hold even as the state needed at least Rs1300 crores immediately to come out of the storm.
The fiscal crisis in the state has been building for the last couple of months due to steep increase in the state's budget on salaries and pensions. Officials said more than 70% of the monthly budget of the state was being consumed in payments of the government staff. " It has literally been hand to mouth situation in the recent past which has brought the state on the verge of a declaring a fiscal emergency", said a senior official.
As an urgent effort the state government has asked the Greater Mohali Development Authrotiy ( GMADA) to raise Rs1000 crores from the market after mortgaging the government land.
" Such desperate measures would be essential as the state has already exhausted its annual borrowing limit of Rs9500 crores from the RBI, " he added.
The state has resorted to fire-fighting measures also because the budget session of the Assembly would commence within a week and the government is likely to face heavy uproar from the opposition.
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