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Centre to settle dispute between UP and UK pension liabilities

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Shishir Prashant New Delhi/ Dehra Dun
Last Updated : Jan 21 2013 | 12:40 AM IST

The Centre has agreed to settle the long-standing dispute between Uttarakhand and Uttar Pradesh over non-settlement of pension liabilities of Rs 1545.98 crore.

The move came after chief minister Maj Gen (retd) B C Khanduri met Union finance minister Pranab Mukherjee in New Delhi yesterday to apprise him of extreme financial difficulties being faced by his government which has been forced to raise market borrowings to the tune of Rs 700 crore during the current financial year.

In this regard, Khanduri said as per the records of ministry of home affairs, under the ambit of mutual agreement between the successive state governments, the government of Uttar Pradesh was to release a payment of Rs 1545.98 crore to the government of Uttarakhand in respect of the pension liabilities for the period from November 9, 2000 to March 31, 2009 after the bifurcation of Uttar Pradesh.

The government of Uttar Pradesh has not given any commitment for making entire payment of Rs. 1545.98 crore to Uttarakhand during the current financial year. Instead it has just made a provision of Rs. 500 crore in its budget for the current financial year towards the above mentioned liabilities, an official statement said.

"Out of total allocation of Rs. 500 crore, an amount of Rs. 200 crore has only been released to the government of Uttarakhand," Gen Khanduri explained to Mukherjee in a matter-of-factly manner.

Further, Gen. Khanduri pointed out to the finance minister that inordinate delay in the settlement of liabilities has forced the government to borrow substantial funds from the market at considerable interest rates. As per records, borrowings by the government of Uttarakhand mount to Rs. 700 crore in the current financial year, he said.

As a matter of fact, pension payments from government of Uttar Pradesh form government of Uttarakhand’s scheme of financing of the annual Plan for 2011-12. This is in consonance with the approval of planning commission. Any shortfall on this account is most likely to jeopardise state finances, Khanduri said.

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Keeping in view the above mentioned facts, Khanduri made a fervent plea before the finance minister that immediate balance payment of Rs 1345.98 crore to government of Uttarakhand by adjustments from the short release of "Normal Central Assistance" to the government of Uttar Pradesh would help government of Uttarakhand stand in good stead.

Mukherjee was seemingly convinced about the financial constraints being faced by Uttarakhand due to pension liabilities and assured Gen Khanduri of all possible assistance to his government, the statement added.

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First Published: Oct 03 2011 | 12:47 AM IST

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