Punjab CM urges Centre for relaxation of FRBM Act

Punjab Chief Minister Amarinder Singh today urged the central government to relax the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, and enhance the borrowing limit to enable the state government to meets its agriculture debt waiver commitments.
In separate meetings with Prime Minister Narendra Modi and Finance Minister Arun Jaitley here, the chief minister sought their intervention in this regard and thus support the financially beleaguered state.
Amarinder called for enhancing the borrowing limit by Rs 10,000 crore to help the Congress-led state government procure additional market loans for the debt waiver/relief scheme, aimed at providing succour to debt-ridden farmers, who were resorting to extreme measures, an official statement said.

A spokesperson of Chief Minister's Office (CMO) said Amarinder pointed out at the meetings that his government had waived off crop loans up to Rs 2 lakh for all small and marginal farmers, while providing debt relief up to Rs 2 lakh to marginal farmers having total debt of over Rs 2 lakh each. Besides, the state government had also decided to take over the total debt of suicide-affected families.
With total beneficiaries of 10.25 lakh farming families, the financial implication of these steps is to the tune of Rs 9,500 crore, the chief minister said.
He added that the current annual borrowing limit at 3 per cent of the GSDP amounted to Rs 12,819 crore, leaving a gap of Rs 10,273 crore between revenue and expenditure.

Thus, additional market borrowings are required by the state government to fund its debt waiver scheme and rescue the farmers from the vicious debt cycle, he said.
Punjab Finance Minister Manpreet Badal and other senior officials accompanied the chief minister for his meeting with Jaitley.