WP Final 20.06

A
WHITE PAPER
on
STATE FINANCES
June 2017
GOVERNMENT OF PUNJAB
DEPARTMENT OF FINANCE
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State Finances
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CONTENTS
Chapter No. Name Page No.
1 Executive Summary 1
2 Why a White Paper? 7
3 State Finances 19
4 Liability of Cash Credit Limit for Food Grains 59
5 Financial burden on account of UDAY Scheme 75
6 Public Sector Undertakings 81
7 Off Budget Funds 95
8 Abbreviations
9 Definitions
10 References
11 Annexures (I – XXII)
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LIST OF STATEMENTS
Number Name Chapter Name Chapter Page

No. No.
1.1 Outstanding Liabilities Why a White 1 11
Paper?
1.2 Loans raised by State Entities Why a White 1 12

Paper?
1.3 Outstanding Debt as on 31.03.2017 Why a White 1 15

Paper?
1.4 True Financial Position -2016-17 Why a White 1 15

Paper?
1.5 Important fiscal metrics Why a White 1 17

Paper?
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State Finances
LIST OF TABLES
No. No.
1 Pending liabilities of Atta Dal Scheme State Finance 2 27
2 Unpaid Liabilities of State State Finance 2 29
3 Composition of Revenue Receipts State Finance 2 32
4 Share of Central Transfers State Finance 2 34
5 Total Revenue Receipts State Finance 2 35
6 Salaries, Pension and Interest State Finance 2 40

Payments
7 Share of Revenue and Capital State Finance 2 43

Expenditure
8 Trends in Revenue Deficit State Finance 2 45
9 Trends in Fiscal Deficit State Finance 2 46
10 Outstanding Debt to Total Revenue State Finance 2 48

Receipts
11 Outstanding Debt and Expenditure on State Finance 2 48

Debt Servicing
12 Borrowings from Agencies (2016-17) State Finance 2 50
13 Government Guarantees State Finance 2 53

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No. No.
14 Total Debt as on 31st March 2017 State Finance 2 54
15 Revenue Receipt - Actual v/s State Finance 2 55

Budgeted
16 Capital Expenditure- Actual v/s State Finance 2 56

Budgeted
17 Plan Outlay - Actual v/s Budgeted State Finance 2 56
18 Terms of Agreement of CCL Liability Of Cash 3 70

Credit Limit For
Food Grains
19 PSPCL debt and transfer to PSPCL Financial Burden On 4 78
Account Of Uday
Scheme
20 Receipts and Expenditure of Off Budget Funds 6 98
Boards/Funds/ - 2014-15 to 2016-17
21 Receipts and Expenditure of Societies Off Budget Funds 6 98

- 2016-17
22 Receipts and expenditure of Societies Off Budget Funds 6 99

for 2014-15 to 2016-17
23 Income & Expenditure of PIDB Off Budget Funds 6 101
24 Detail of debt raised by PIDB Off Budget Funds 6 101
25 Expenditure detail of Punjab Mandi Off Budget Funds 6 105

Board
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State Finances
LIST OF FIGURES
Numb Name Chapter Page

er No. No.
1 GSDP Growth Rate 2 21
2 Balance in Current Revenues 2 23
3 Components of State's Total Revenue Receipts - Punjab 2 30

(2016-17)
4 Composition of Revenue Receipts (% to Total Revenue 2 31

Receipts)
5 Own Tax Revenue Receipts (2016-17) 2 33
6 Components of Expenditure (2006-07) 2 37
7 Components of Expenditure (2016-17) 2 37
8 Components of Revenue Expenditure 2 38
9 Total Revenue Expenditure (2006-07) 2 41
10 Total Revenue Expenditure (2016-17) 2 41
11 Revenue Deficit as % of GSDP 2 42
12 Fiscal Deficit as % of GSDP 2 46

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EXECUTIVE SUMMARY
1. The new Government assumed office on 16th March 2017. On 29th March 2017,
RBI shutdown the State treasury owing to the breach in the limits set by RBI. As
on 31st March 2017 bills amounting to `7791 crore were pending and ultimately
lapsed as the treasury was left with no money.
2. To meet the expenditure in implementing the Atta Dal Scheme, funds were
arranged by the State Procuring Agencies (SPAs) at their own level by diverting
funds from CCL provided for procurement of wheat and paddy. The unpaid
liabilities of `1747 crore are still outstanding as on 31st March 2017.
3. The arrears of `2773 crore of DA for almost last 2 years have not been paid to
the employees and payments have simply been kept in abeyance.
4. `2342 crore were pending as arrears of payment that the State Government has
to make on account of power subsidy to the Punjab State Power Corporation Ltd.
5. The immediate commitment that the State government had to discharge including
unpaid bills in the treasury when the new Government assumed office, was to the
tune of `13039 crore.
6. When the new Government took over, it was welcomed with the additional liability
of `29919.96 crore (as on 31st March 2017) in the form of loans to settle the so
called CCL (Cash Credit Limit) legacy accounts. As a result the State Government
shall have to bear an additional `270 crore per month and an annual liability of
`3240 crore.
7. The previous Government had been forcing agencies like PIDB, RDB, PUDA and
others to incur debt on its behalf. A part of this debt has also flown into the State
treasury in what is called as 'informal debt', which stands at `4435 crore.
8. During the last 10 years, the growth rate of the State remained lower than the All
India average except for the year 2013-14 in which the growth was slightly higher
i.e. by meagre 0.23%, than the All India average. The growth rate was as low as
4.20% against 7.5% of All India level in the year 2014-15.
Page | 1 Executive Summary

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9. The average GSDP growth recorded by the State during the period from 2006-
07 to 2015-16 has been at 6.37% which is lower than the average growth
recorded by the States like Goa (10.68%), Bihar (10.08%), Gujarat (9.70%),
Madhya Pradesh (8.54%), Haryana (8.30%), Maharashtra (7.71%) and Tamil
Nadu(7.66%).
10. The State continued to hold the top position in Per Capita Income across the
country for a long time, it has now lost the race to the States like Haryana and
Maharashtra. The State rank has slid from the top to the seventh position
amongst the major States. States like Maharashtra, Kerala, Tamil Nadu,
Karnataka, Gujarat and even Himachal Pradesh are now ahead of Punjab.
11. Each year, before the Annual Budget is presented, an estimate of the Balance in
Current Revenues (BCR) is made. The State has been persistently running huge
negative BCR starting with (-) `3656 crore in 2007-08, (-) `5757 crore in 2009-
10 which increased to (-) `6544 crore in 2014-2015, (-) `6138 crore in 2015-16
and was (-) `4488 crore in 2016-17.
12. State’s own revenues as a share of total revenue have declined from 77.34% in
2006-07 to 68.50% in 2016-17. As against this in the corresponding period, the
share of Central taxes has gone up from 22.66% to 31.50%. This indicates a
perceptible decline in the State’s ability to raise resources internally during the
last 10 years, 2007-2017.
HUGE AMOUNT OF OUTSTANDING LIABILITIES
13. The share of central taxes in total receipts have increased from 9.32 % (2006-07)
to 21.14 % (2016-17)
1.4 indicating the
Apart from State’sbills
pending increasing dependence
amounting to about upon
`7791Central
crore,
transfers and devolution during
that the 10
lapsed onyear
theperiod.
31st March, 2017, the previous
14. The transfer of Grants-in-Aid from Centre
Government has decreased
left behind from
outstanding 13.33%
liabilities in 2006-
amounting
07 to 10.36% in 2016-17. The primary
`13039 crore, byreason for expenditure
deferring this is the lack of the State
on various to
counts,
release its part of the share
whichinare
central
shown schemes. As a 1.1.
in Statement result, the State has been
unable to fully leverage the Grants-in-aid from the Central Government.
15. In 2016-17, 85% of total Revenue Receipts were incurred on salaries, interest
payments and pensions. If we add the power subsidy, this together accounts for
102% of the Revenue Receipts of the State.
16. The average salary of the Punjab Government employees is much higher as
compared to the other States and even the Government of India.

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17. Revenue Expenditure has increased from `18544 crore (87.76% of total
expenditure) in 2006-07 to `52018 crore (92.18% of total expenditure) in 2016-
17.
18. During the same period, expenditure on Salaries rose from `5783 crore to
`19758 crore (an increase of 242%), on Pensions from `1905 crore to `8749
crore (an increase of 359%) and on Interest from `4152 crore to `10098 crore
(an increase of 143%).
19. The share of capital expenditure has declined over the years, from 12.24% in
2006-07 to 7.82% in the year 2016-17. The expenditure had fallen to as low as
4.61% in the year 2011-12
20. Revenue Deficit has hit its worst in the last ten years. In 2006-07 the Revenue
Deficit was `1749 crore. However, this Deficit recorded more than two-fold
increase in the very first year of the previous government coming into power i.e.
2007-08 at `3823 crore. It has since increased to `8550 crore in 2015-16 and
the position is much worse in 2016-17. The State was to achieve a zero revenue
deficit from the year 2011-12 onwards.
21. Fiscal deficit of `4384 crore was recorded in the year 2006-07, which has
1.5 It is worth noting that most of these outstanding
increased by 168% to `11762 crore in 2015-16. This trend indicates that the
liabilities relate to benefits for the scheduled castes and
Government spending was being increasingly financed by raising loans.
other disadvantaged sections of society, dues of
22. Revenue deficit was at 1.38% of the GSDP at the end of financial year 2006-07,
employees, funds received from the Government of
it increased 2.18% in the year 2015-16.
India and financial institutions for specific projects or
23. The total debt servicing expenditure in 2016-17 was `14145 crore (Principal
awards of the Central and State Finance Commissions
`4047 crore and Interest Payment `10098 crore). This is likely to increase by
in favour of ULBs and PRI's. Not only are these
more than 30% in 2017-18 on account of the increased debt liabilities of
liabilities going to pre-empt the future budgetary
`29919.96
provisions,crore thatevent
in the the previous
of theirGovernment
not being took upon itself in exchange for
settled
concealing the liabilities
quickly, they are also on likely
food account.
to block the future
24. The State introduced
development of the state. the “Guarantee Redemption Fund Scheme”, with an
objective to meet its obligations arising out of the Guarantee extended to State
level entities and was required to contribute minimum amount of `1241.58 Crore
over the period 2013-14 to 2015-16, to cover any unforeseen State Guarantee
invocation.

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State Finances
However, poor recovery and non-contribution, has put the State fiscal to a great
risk.
25. The Government has extended long-term Guarantees to the tune of `20608.17
crore as on 31.03.2017 (the cap is 80% of the total Revenue Receipts of previous
year). While the above figures may look healthy indicating a cushion for the State
government to provide Guarantees for the debt that its enterprises may raise, the
truth is that the Guarantees provided earlier to PSPCL and the food agencies
have now been converted into State debt as a result of the UDAY scheme and
the loan taken over on account of CCL of food agencies by the State Government.
26. The shortfall between the actual revenue receipts and the budgeted revenue
receipts has been `2009 crore in 2010-11, `7562 crore in 2013-14 and `4773
in 2016-17.
27. Similarly, the actual expenditure against the budgeted estimates on plan
allocations was 143.80% of the approved outlay in 2006-07 whereas the same
has since been decreasing over the subsequent years and in the year 2011-12
this ratio came down to 64.73%.
28. Despite the support of the State Government under the UDAY Scheme to PSPCL,
it has been running into losses from its very inception. It suffered losses of `1695
crore during the year 2015-16 and has accumulated losses of `3196 crore as on
31.03.2016.
29. The total amount of outstanding Government loans of PSUs is `17030.92 crore.
The outstanding loans of other Institutions were `22593.95 crore, and loans
`20608.17 crore was outstanding against Government Guarantee. In case of
default, it is the bounden duty of the State Government to repay these loans to
the lenders. The State Government received only a small amount of `4.01 crore
during the year 2015-16 as dividend on a huge investment of `8234.30 crore in
these PSUs and Co-operative Institutions.
30. It has been observed that amongst the Administrative Departments there is an
increasing tendency to float Boards, entities/societies such as PIDB, PMB, PLRS,
ETTSA etc..

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State Finances
These entities retain the revenues generated by various levies, in a separate

corpus fund, instead of depositing the same in the Consolidated Fund of the
State. These expenditure were neither presented for the sanction of the Punjab
Vidhan Sabha and nor were these subject to the audit of CAG.
31. PSWC was constrained to annul the tendering process. Surprisingly, PUNGRAIN
without awaiting the report of the subcommittee of the Ministers and without any
approval and guarantee for silo capacity utilization from FCI, proceeded ahead
with the creation of silo capacity against the Allocation of Business rules. The
haphazard creation of silo capacity by PUNGRAIN without any uniform policy and
study of existing storage capacities of all agencies may affect present utilization
of storage capacities of State Procuring agencies (SPAs) resulting in financial
loss to SPAs.
32. It is observed that the decisions of these entities were unplanned, scattered and
against the core mandate of the constitution of Boards/societies and also ‘need
based assessment’ was found missing. The CAG report has observed this as a
violation of Article 266 (1) of the Constitution of India.

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Page | 6 Chapter 1: Why a White Paper?

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State Finances
WHY A WHITE PAPER?
Chapter 1

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State Finances

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State Finances
WHY A WHITE PAPER?

Chapter 1
1.0 A White Paper is defined as, "An authoritative report or guide

that informs readers concisely about a complex issue and
presents the issuing body's philosophy on the matter. It is
meant to help readers understand an issue, solve a problem
or make a decision". This White Paper is nothing more or
nothing less than that. It is a presentation of the most complex
The Reserve Bank of problem being faced by the state Government in the simplest
India in its letter of
29th March, 2017 possible way.
States:
“…As per the scheme
of Ways and Means THE RESERVE BANK OF INDIA (RBI) SHOCKER
Advances to State
Governments for the
1.1 On assuming office on the 16th March, 2017, after the
year 2016-17, RBI is
constrained to conclusion of elections to the Punjab Vidhan Sabha, this
suspend the
Government was shocked to learn that the financial position of
payments to State
Government. RBI has the state was far worse than even their wildest imagination.
accordingly advised
While the treasury was virtually lying closed under the weight
its offices and
agencies to suspend of bills amounting to about `7791 crore pending clearance ,
payments of the State
Government with farmers were all set to sell their Rabi crop and the Government
effect from March was awaiting sanction of the Cash Credit Limit (CCL), came a
29th, 2017…”
shocker from the RBI, vide it's letter dated the 29th March,
2017, which reads as follows.
"...As per the scheme of Ways and Means Advances (WMA)
to State Governments for the year 2016-17, RBI is constrained
to suspend the payments to State Government, RBI has
accordingly advised its offices and agencies to suspend
payments of the state Government with effect from March
29th, 2017..."

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State Finances
“…in the face of

1.2 The fact that the RBI had to resort to the extreme step of
'smart' accounting
suspension of payments to the state Government, perhaps,
practices resorted to
for the first time in its history, speaks volumes about the
by the previous
precarious financial position, the new Government inherited
Government, they
reveal the picture, but from its predecessor.
only partially….”
THE ART OF BOOK-COOKING
1.3 Normally, budget documents and CAG Accounts for the

relevant years ought to reflect the true state of State's
finances. However, in the face of 'smart' accounting
practices resorted to by the previous Government, they
reveal the picture, but only partially. The art of book
cooking comprises (i) fast-forwarding the receipts; (ii)
deferring expenditure; (iii) non-provisioning for contingent
liabilities and; (iv) incurring off-budget liabilities. In the
process, the integrity of the budgets presented by them
becomes deeply suspect, thus blunting the very edge of
the Government accountability.
HUGE AMOUNT OF OUTSTANDING LIABILITIES
1.4 Apart from pending bills amounting to about `7791 crore,

that lapsed on the 31st March, 2017, the previous
Government left behind outstanding liabilities amounting
`13039 crore, by deferring expenditure on various counts,
which are shown in Statement 1.1.

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Statement 1.1: Outstanding Liabilities (`Crore) “…in the event of
Sr. No Description Amount their not being settled

1. Arrears of Dearness Allowance 2773 quickly, they are also
2. Arrears of Power Subsidy 2342
3. Arrears of Atta Dal Scheme 1747 likely to block the
4. Non-release of funds received from the Govt. of 1413 future development of
India (GoI)
5. Non-payment of pensions 692.04 the state…”
6. Non-payment of Scholarships to the students 35.31
belonging to SC category
7. Arrears of Shagun Scheme 18.61
8. Other Welfare Schemes 291.16
9. Non release of funds to the Urban Local Bodies 253.94
(ULBs) under the Central and State Finance
Commissions
10. Non release of funds to the Panchayati Raj 386.03
Institutions under the Central and State Finance
Commissions
11. Non-release of specific purpose institutional
funds
(a) NABARD 174
(b) World Bank 45
12. Others 2867.91
Total 13039
1.5 It is worth noting that most of these outstanding

liabilities relate to benefits for the scheduled castes and
other disadvantaged sections of society, dues of
employees, funds received from the Government of
India and financial institutions for specific projects or
awards of the Central and State Finance Commissions
in favour of ULBs and PRI's. Not only are these
liabilities going to pre-empt the future budgetary
provisions, in the event of their not being settled
quickly, they are also likely to block the future
development of the state.

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State Finances
“…As raising of loans

MORTGAGING THE FUTURE
and expending
wherefrom was an off
1.6 Yet another very disturbing feature of the State's fiscal
budget exercise, it
is the previous Governments' penchant for abusing its
totally escaped due
various entities to indiscriminately raised loans by
scrutiny, legislative
mortgaging their future revenues or by hypothecating
approval and CAG
audit…” immovable properties at their disposal. The Punjab
Infrastructure Development Board (PIDB), Rural
Development Board (RDB) and the Punjab Urban
Development Authority (PUDA), are prominent among
such entities. Details of loans raised by them are set out
at Statement 1.2 below.
Statement 1.2: Loans raised by State entities (` Crore)

Sr. Name of Entity Amount of Loan Loan Outstanding
No.
1. PIDB 4722.89 3172.93
2. RDB 5795.94 2090.40
3. PUDA 2124.93 1413.49
Total 12643.76 6676.82
Source: Concerned Entities
1.7 Raising loans in this manner is nothing short of selling

the family silver to run your kitchen. However, they
provided a handy window to fund the populist programs
of the then ruling dispensation. As raising of loans and
expending wherefrom was an off budget exercise, it
totally escaped due scrutiny, legislative approval and
CAG audit. Therefore, a special audit would be
absolutely necessary to ascertain as to whether the
loans so raised have been properly accounted for and
their utilization is in accord with the statutory mandate
of these entities and is in keeping with the principles of
financial propriety and prudence.

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State Finances
“…The alacrity with

THE DUBIOUS LEGACY ACCOUNTS
which this was done
not only provided a
1.8 Faced with a huge accumulated gap between the
convenient cover to
outstanding CCL and value of stock of food grains RBI's
the various acts of
direction to the funding banks to provide for the
malfeasance, but the
mismatch and at the sufferance of being denied the
urgency to recover
facility of CCL, the state Government decided to
the due amount from
convert a whopping gap of `29919.96 crore (as on the Government of
31.03.2017) into a clean term loan. It is shocking to India and the
know that this was done, even without the elementary opportunity to strike a
precaution of going into the reasons for the emergence fair bargain with them
of such a huge gap and fixing responsibility of the and the banks was
concerned officials of the state procurement agencies. also lost…”
The alacrity with which this was done not only provided
a convenient cover to the various acts of malfeasance,
but the urgency to recover the due amount from the
Government of India and the opportunity to strike a fair
bargain with them and the banks was also lost. As a
result, the Government of Punjab was burdened with an
onerous debt burden with an annual debt-servicing
liability of `3240 crore for the next twenty years. The
then Government also agreed to square-up any gap
between the outstanding CCL and value of stock that
might emerge in the future as well. In fact, a budgetary
support of `1193.65 has already been provided for this
purpose. This is against the cardinal principle of the
Centralized Procurement Scheme that the State
procurement agencies being agents of the Government
of India are neither to make any profit nor to incur any
loss in the procurement operations and the
Government of India is expected to reimburse all bona
fide cost of procurement incurred by them.

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State Finances
“...it is noted that the

This also flies in the face of the repeated claim of the
decision of the then
previous Government that the gap was fully covered by
Government to
receivables from the Government of India.
square-up the gap
between the 1.9 Secondly, to draw a parallel between squaring up of
outstanding CCL and the Food Account in 2004 and what was done on
value of stock was 10.03.2017 (conversion of a whopping gap of
actually given effect `29919.96 crore into a clean term loan) is rather far-
to on 10.03.2017, just
fetched. As the reasons for the huge gap between the
a day before the
outstanding CCL and value of stocks post 2004 cleanup
Assembly results
are altogether different drawing a parallel between
were scheduled to be
them by dubbing them as a 'Legacy Issue' is nothing
declared…”
more than an attempt at shoving the real issue under
the carpet.
1.10 Thirdly, it is noted that the decision of the then
Government to square-up the gap between the
outstanding CCL and value of stock was actually given
effect to on 10.03.2017, just a day before the Assembly
results were scheduled to be declared. Prudence
demanded that the new Government, which were to
assume office after the declaration of result should
have been given an opportunity to take their own call in
the matter.
THE DEBT TRAP
1.11 The state is already in the tight grip of a debt trap. By

Government books, outstanding debt was `148832
crore at the end of 2016-17, In reality however, it is far
higher, if deferred liabilities, contingent liabilities and
newly acquired liabilities on account of gap in the CCL
account and UDAY bonds are reckoned. Statement 1.3
puts this issue in the correct perspective.

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Statement 1.3: Outstanding Debt as on 31.03.2017 (` Crore) “...In reality however,

it is far higher, if
Sr Description Amount
No deferred liabilities,
1 Outstanding debt including 153098 contingent liabilities
UDAY bonds 2015-16 and
2016-17 and newly acquired
2 Loans from State entities 4435 liabilities on account
3 Clean loan to cover CCL gap 29919.96 of gap in the CCL
Total debt 187452.96
5 Outstanding guarantees 20608.00 account and UDAY
Total debt + guarantees 208060.96 bonds are
Source: (AG Provisional Accounts 2016-17) reckoned…”
A. Total Debt as % of GSDP: 44%
B. Total Debt + guarantees as % of GSDP: 49%
C. Debt Service Ratio to TRR: 31.15%*
* This figure is likely to increase sharply in 2017-18 on account of increased additional Debt
Servicing of `3240 crore per annum on account of the clean term loan taken for the CCL of
food account in March 2017
1.12 From the foregoing analysis, it is evident that the

financial position of the State reflected in its various
budgetary documents, cannot be taken on its face
value. To know the true State of the State Finances, a
trueing up exercise, by reckoning the various
unknowns , is called for which is attempted in
Statement 1.4 for the year 2016-17
Statement 1.4 (a): True Financial Position -2016-17 (` Crore)

Sr. No. Item 2016-17 (BE) 2016-17 Shortfall
(Provisional /Excess
AG
Account)
1 Revenue 50181 45408 - 4773

Receipts
2 Market 12819 13600 781
Borrowings
Source: (State Budget Document and Finance Account of AG Punjab)
Source: (AG Provisional Accounts 2016-17)

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Statement 1.4 (b): True Financial Position -2016-17 (` Crore) “….the Government
Sr. No Item 2016-17 Truing Up revenue has not kept

(Provisional Position 2016- pace with the
A G Account) 17
Government
1 Revenue Deficit 6611 19650
expenditure, leading
Revenue 1.55% 4.59% to ballooning revenue

Deficit as a % and Fiscal Deficits…”
of GSDP
2 Fiscal Deficit 18105 65330
Fiscal Deficit 4.23% 15.27%

as a % of
GSDP
3 Outstanding 148832 187453
Debt
Outstanding 34.78% 43.81%
Debt as % of
GSDP
4 Primary Deficit 8007 55232
Primary Deficit 1.87% 12.91%

as % of GSDP
Source: (AG Provisional Accounts 2016-17)
IN A FREE FALL
1.13 Important fiscal metrics, over the last ten years, lead to
the inescapable conclusion that the State Finances are
in a free fall. These are shown in Statement 1.5.
1.14 A plain reading of these numbers reveals that:
 the Government revenue has not kept pace with the
Government expenditure, leading to ballooning
Revenue and Fiscal Deficits
 A high percentage of expenditure is non-
discretionary and committed, which hardly leave
any fiscal space for the new Government.

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State Finances
“…if no corrective
 Revenue Deficit at 54% of Fiscal Deficit results in
measures are taken,
most of the loans raised by the Government being
it will take a heavy toll
used for meeting the committed expenditure or
on the future
repaying the past loans.
development of the
State...”  Capital expenditure a meagre 7% of total expenditure
shows the Government is hardly investing in the
future of the State.
 Outstanding debt at 43.81% of GSDP and Debt
Service Ratio (DSR) at 31.15% is totally
unsustainable
 The State's fiscal is inflicted with a deep-rooted
structural imbalance and, if no corrective measures
are taken, it will take a heavy toll on the future
development of the State.
Statement 1.5: Important fiscal metrics (` Crore)
Sr. Description 2006-07 2016-17*
No
i) Revenue Deficit 1749 6611
ii) Fiscal Deficit (excluding UDAY) 4384 12336
iii) Primary Deficit (Fiscal Deficit 232 2238

less Interest) (excluding UDAY)
iv) Revenue Deficit as % of Fiscal 40% 54%
Deficit
v) Committed Expenditure as % of 71% 85%
Revenue Receipt
vi) Capital Expenditure as % of 12.24% 7.82%
Total Expenditure
vii) States own Revenue as % of its 77.34% 68.5%
Total Revenue
viii) Outstanding Debt 51155 187453
ix) Outstanding Debt as % of 305% 413%

Revenue receipts
x) Outstanding Debt as % of 40% 44%
GSDP

* Data for 2016-17 are the initial figures published by the AG Punjab

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State Finances
“…an empty treasury

CONCLUSION
and fast development
do not go together for
1.15 The State's financial decline has now seamlessly
a very long time…”
merged into its economic decline. Punjab's economy
has been in a state of precipitous decline over the last
one decade. During this period the rate of growth has
been consistently below the national average. It is now
one of the slow growing states of the country. In per-
capita terms, it has slid from the top to the seventh
position amongst the major states. The gap between
the per capita income of Punjab and the national per
capita income is closing down very quickly. It holds a
clear lesson that an empty treasury and fast
development do not go together for a very long time.
Weak finances have also impaired the capacity of the
Government to deliver quality public services to its
people. To conclude on a positive note, one may say
that, the prevalent financial and economic situation is a
reason enough for the Government to act fast and
decisively.

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State Finances
STATE FINANCES
Chapter 2
Page | 19 Chapter 2: State Finances

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State Finances

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State Finances
STATE FINANCES
Chapter 2
2.0 A graphical depiction of the rate of growth of GSDP of the

State and its comparison with All India level for the period
2006-07 to 2016-17 in Figure-1 reveals that the growth rate of
State was one of the highest i.e. 10.18% in 2006-07 and was
more than the All India average of 9.57%. However, in last 10
years, the growth rate of the State remained lower than the All
“…the growth rate of India average except for the year 2013-14 in which the growth
State was one of the was slightly higher i.e. by meagre 0.23% than the All India
highest i.e. 10.18% in average. It came down as low as 4.20% against 7.50% of All
2006-07 and was India level in the year 2014-15. This clearly shows that the
more than the All State has been falling behind the national average,
India average of
continuously.
9.57%...”
Figure-1: GSDP Growth Rate (In %)

“…It came down as
low as 4.20% against
7.50% of All India
level in the year
2014-15…”
Source: (Department of Economic & Statistical Analysis, Punjab)

Note: *From 2012-13 onwards at 2011-12 prices.

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State Finances
“…the State is
2.1 From the nationwide comparison of growth trajectory of
constantly facing
various States (Ministry of Statistics and Programme
grave paucity of
Implementation, GoI), one can observe that the average
resources for
growth of GSDP recorded by the State of Punjab for the period
financing its Capital
Expenditure…” 2006-07 to 2013-14 has been at 6.85%, which is lower than
the average growth recorded by the States like Bihar
(10.85%), Gujarat (8.63%), Madhya Pradesh (8.62%),
Haryana (8.43%), Maharashtra (8.44%) and Tamil Nadu
(8.60%). The details are at Annexure I.
2.2 When one compares the Per Capita Income of the State with
the other States and the national average, the picture is very
discouraging. While the State continued to hold the top
position in Per Capita Income across the country for a long
time, it has now lost the race to the States like Haryana and
Maharashtra. The State slid from the top to the seventh
position amongst the major States. States like Maharashtra,
Kerala, Tamil Nadu, Karnataka, Gujarat and even Himachal
Pradesh are now ahead of Punjab.
2.3 The State finances are in a perilous position. Apart from
meeting the day-to-day challenge of keeping the treasury
afloat for the routine administrative Expenditure, the State is
constantly facing grave paucity of resources for financing its
Capital Expenditure. The situation is alarming. Each year,
before the Annual Budget is presented, an estimate of the
Balance in Current Revenues (BCR) is made. BCR indicates
as to what the State can contribute to development after
meeting its inevitable routine Expenditures. If Revenue
Expenditure is more than Revenue receipts, it means that the
State has to devote some of its borrowing to first meet its
Revenue Expenditure, and correspondingly funds available for
financing development will reduce.

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State Finances
“…If Revenue
The State has been persistently running huge negative
Expenditure is more
BCR starting with (-) `3656 crore in 2007-08, (-) `5757
than Revenue
crore in 2009-10 which increased to (-) `6544 crore in
receipts, it means that
2014-2015, (-) `6138 crore in 2015-16 and (-) ` 4488 crore the State has to
in 2016-17. It must be mentioned that, the BCR in the year devote some of its
2006-07 was (+) `2252 crore given at Annexure II. In the borrowing to first
process, unfortunately, the budgets have lost their sanctity. meet its Revenue
The State unfortunately, has been living on a financial lie Expenditure, and
correspondingly funds
and ignoring truth for a long time.
available for financing
development will
Figure-2: Balance in Current Revenues (` crore)
reduce… ”
2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-
07 08 09 10 11 12 13 14 15 16 17 BE
BCR 2252 -3656 -3637 -5757 -4650 -6373 -6224 -5739 -6544 -6138 -4488
Source: (Report of the Comptroller and Auditor General of India on State

Finances)

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State Finances
“…the State was

WAYS & MEANS, AND OVERDRAFT
facing liquidity crunch
for 269 days in the
2.4 The RBI has fixed the Ways and Means Advance (WMA) limit
year 2016-17...”
at `925 crore for the State of Punjab from February 2016.
Once the payment from the State's account exceeds the
actual receipt at any point of time, the treasury goes into ways
and means. Further, whenever the net payment out of the
State treasury crosses WMA, the State goes into overdraft. As
per the RBI guidelines, the State can be in overdraft for 36
working days in a quarter i.e. 144 days in a full year. RBI
guidelines mandate that the State treasury cannot be in
overdraft for a period of more than 14 working days
continuously. In case it happens, the RBI stops all payments
and no cheque issued by the State government is honored.
Over and above this, in case the overdraft exceeds more than
100% of the ways and means limit, the payments are allowed
only up to 5 working days. If the over payment is not brought
down below the level of `925 crore, again the payments will
be stopped.
2.5 Unfortunately, the RBI had to stop the payments on 29th March
2017. This has put the State in a very embarrassing position
and may adversely affect the credibility of its future borrowings
and the sovereign guarantees issued by the State
Government for future. Certainly, it does not behove well for
the Fiscal health of the State.
2.6 During the year 2016-17, the State remained in overdraft for
104 days against the 144 days permissible in a year and in
addition, it remained under Ways and Means Advances
(WMA) for 165 days. Thus the State was facing a liquidity
crunch for 269 days in the year.

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State Finances
“…The immediate
UNPAID LIABILITIES
commitment that the
State government
2.7 The immediate and medium term liability that the new
had to discharge
government has to discharge is staggering. The
including unpaid bills
immediate commitment that the State government had to in the treasury when
discharge including unpaid bills in the treasury when the the new government
new government assumed office would be to the tune of assumed office would
`13039 crore. The details of which are explained in the be to the tune of
following paras: `13039 crore…”
2.8 Pending Liabilities of various grants/loans received

from Government of India: The State Government is
yet to release `2437 crore on account of various
grants/loans received from Government of India during
the year 2016-17. This includes Central Assistance for
various Central Sector Schemes; NABARD loans;
External Aided Projects (EAP); Welfare Schemes; and
other Flagship Programs.
2.9 The Government of India has identified certain centrally

sponsored schemes, total 66, which are being
implemented in the State of Punjab also. The schemes
pertain to various departments and ministries. The
proposals are being prepared by the State departments,
which are approved by various competent authorities of
the Government of India. The funding pattern under the
various schemes varies from 100% centrally sponsored
to those that are shared as 75:25 or 60:40 etc.

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State Finances
“…Funds amounting
The major centrally sponsored schemes are RKVY,
to `1413 crore have
Mid Day Meal, Sarv Shiksha Abhiyan, National Health
been received from
Mission, SMART CITIES, AMRUT etc. The
Government of India
Government of India releases funds which are first
in 2016-17, which
received in the treasury and after a proposal is
were not released to
the departments...” received from the concerned administrative
department, the same are released to them. Funds
amounting to `1413 crore have been received from
Government of India in 2016-17, funds amounting to
`150 crore related to welfare schemes for SC/BCs,
which were not released to the departments; and the
same were utilized/ diverted either in meeting the
Revenue Expenditure or in other State schemes
2.10 There are certain projects which are funded through

loans from NABARD. The proposals are prepared by
the department and sent to NABARD which has fixed
a limit for the State. This limit is fixed on yearly basis.
For the year 2016-17, NABARD had fixed a limit of
`800 crore. The NABARD loans are extended to the
State at an interest rate of 5.5% and are thus low cost
funds which help the State in building Capital assets.
However, even these funds amounting to `174 crore
could not be released to the departments concerned
and were diverted elsewhere.

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State Finances
“…The pending
2.11 Pending Liability of Atta-Dal Scheme: Atta Dal
liability on this
Scheme was launched by the State government on 15
account (Dearness
August, 2007. Under the scheme, wheat and pulses are
Alone) alone is
being supplied on subsidized rates of `2 per kg and
`2773 crore…”
`30 per kg respectively. To implement Atta Dal
Scheme, no financial assistance was provided by the
previous Government. To meet the Expenditure, funds
were arranged by the procurement agencies
(PUNSUP, MARKFED, PSWC, PAIC) at their own level
by diverting funds from CCL provided for procurement
of wheat and paddy. A total liability of `1747 crore is
still outstanding with various agencies, as per details
given in Table 1.
Table 1: Pending liabilities of Atta Dal Scheme (` crore)
Sr. No Name of agency Claim

1 PUNSUP 1125.25
2 MARKFED 349.27
3 PSWC 52.34
4 PAIC 220.71
TOTAL 1747.57
Source: (Department of Food & Civil Supplies, Government of Punjab)
2.12 Pending Liability of Dearness Allowance: State

Government has been giving D.A. to its employees
from time to time. However, the date of giving D.A. is
not the same as the date given by the Government of
India. A decision to give arrears has been taken only
in respect of D.A. for the installments due from 100%
to 113%. The pending liability on this account alone is
`2773 crore (Annexure III).

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State Finances
“…bills of `7791
2.13 Power Subsidy: The Government of Punjab has
crore including some
been providing free power to the farmers for the tube
of the above and a
wells and also to some other sections of the society
few other like salary
both domestic and industrial.
arrears, retiral
2.14 The agricultural consumption and its Tariff are
benefits, office
expenses, POL etc. determined on year to year basis by the Punjab State
were pending in Regulatory Commission on the basis of Tariff petition
treasury, all of which filed by PSPCL. Based on commitment given by the
lapsed on 31.03.2017 Government, the Commission determines the amount
as the treasury did of subsidy for different categories of consumers in its
not have funds to Tariff order. The amount subsidy for SC DS & Non SC
honour these bills...”
BPL consumers determined in the Tariff order PSERC
for the year 2016-17, was `6113.66 crore and
`1483.74 crore respectively.
2.15 Further, additional subsidy determined by the
Commission for OBC consumers and small power
consumers makes the total subsidy payable during
2016-17 to `7943.07 crore, out of which, only an
amount of `5600.70 crore was released, leaving a
balance of `2342.37 crore as on 31.03.2017. This has
led to a severe stress on the financial health of
PSPCL.
2.16 Apart from the above, bills of `7791 crore including
some of the above and a few other like salary arrears,
retiral benefits, office expenses, POL etc. were
pending in treasury, all of which lapsed on 31.03.2017
as the treasury did not have funds to honour these
bills.

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State Finances
“…the total unpaid

2.17 In addition, many departments especially the
liabilities of State
Engineering Departments have incurred liabilities
Government stood at
based on the budgetary provisions during the course
`13039 crore as on
of the year 2016-17, whose bills would now be
31st March 2017,
presented to the State treasury.
plus some of the
Thus, the total unpaid liabilities of State Government liabilities that would
stood at `13039 crore as on 31st March 2017, plus be presented during
some of the liabilities that would be presented during the course of the year
the course of the year for works that have been for works that have
executed based on the inflated budgetary provisions. been executed based

on the inflated
budgetary
provisions...”
Table 2: Unpaid Liabilities of State (` crore)
Sr. No. Particulars Amount

A. Atta-Dal Scheme 1747
B. Dearness Allowance 2773
C. Power Subsidy 728
Pending Bills in the treasury including
D. some of the above and a few others 7791*
like salaries, office expenses, POL etc.
Total (A to D) 13039
*This includes the amount of lapsed bills of:
 Centrally Sponsored Schemes: `845.11 crore
 State Plan schemes: `1857.86 crore
 Power Subsidy: `1614 crore
STATE REVENUE RECEIPT
2.18 The Receipts on account of Revenue in the

consolidated fund of the State arise mainly from three
major streams. These are as follows:

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State Finances
“…The share of
 State’s Own Tax Revenue
Central transfer grew
 State’s Own Non Tax Revenue
in the year 2015-16
 Central Transfers (Tax Share & Grants)
by 70%. This was on
account of the award 2.19 State’s own Tax Revenue constitutes the major share
of the Fourteenth of the total Revenue Receipts of the State, accounting
Finance for as much as 61% in the year 2016-17 (Data for 2016-
Commission…” 17 are the initial figures published by the AG Punjab).
The own Non Tax Revenue in State accrues largely
from fees levied on services and accounts on an
average to about 7% of the total Revenue Receipts.
The State’s share of Central Taxes and Grants from
Central Government depends on the awards of the
Finance Commission and the allocations on account of
Central Schemes respectively and together account for
32% of the Revenue Receipts.
2.20 The share of Central Taxes grew in the year 2015-16
by 70%. This was on account of the award of the
Fourteenth Finance Commission. The increase was on
account of different principles adopted by the FFC/
Government of India for sharing of central taxes with
the states.
Figure 3: Components of State's Total Revenue Receipts - Punjab

(2016-17; ` crore)
Source: (Data for 2016-17 are the initial figures published by the AG Punjab)

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State Finances
“…the State’s own

STATE’S OWN TAX & NON-TAX REVENUE
Revenues as a share
of total Revenue has
2.21 Revenue Receipts increased from `16795 crore in
declined from 77.34%
2006-07 to `45408 crore in 2016-17 (an increase of
in 2006-07 to 68.50%
170%). Against this, receipts from Government of India in 2016-17…”
i.e. share of central taxes and grants increased from
`3806 crore to `14304 crore during the corresponding
period (an increase of 276%) whereas State’s Own Tax
and Non-Tax Revenues increased from `12990 crore
to `31104 crore (an increase of 139%)
2.22 From the trends in Revenue Receipts for the period
2006-07 to 2016-17 as depicted in Figure 4, it may be
seen that the State’s Own Revenues as a share of total
Revenue have declined from 77.34% in 2006-07 to
68.50% in 2016-17 (Table 3). As against this in the
corresponding period, the share of Central transfers
has gone up from 22.66% to 31.50%. This indicates a
perceptible decline in the State’s ability to raise
resources internally.
Figure 4: Composition of Revenue Receipts (% to Total Revenue

Receipts)

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State Finances
“…The share of Table 3: Composition of Revenue Receipts (In %)

Central transfers has
Year State’s Own Revenue Central Transfers
gone up from 22.66%
to 31.50%.This Tax Non-Tax Total Share in Grant in Total
Revenue Revenue Taxes Aid
indicates a 2006-07 53.69 23.65 77.34 9.32 13.34 22.66
perceptible decline in
2007-08 51.46 27.31 78.77 10.27 10.97 21.24
the State’s ability to
raise resources 2008-09 53.83 27.92 81.75 10.06 8.18 18.24
internally...”
2009-10 54.34 25.51 79.85 9.68 10.47 20.15
2010-11 60.95 19.31 80.26 11.05 8.69 19.74
2011-12 71.82 5.33 77.15 13.55 9.30 22.85
2012-13 70.47 8.20 78.67 12.66 8.66 21.32
2013-14 68.69 9.09 77.78 12.62 9.69 22.31
2014-15 65.53 7.38 72.91 12.05 15.04 27.09
2015-16 64.28 6.38 70.66 19.29 10.05 29.34
2016-17 61.26 7.24 68.50 21.14 10.36 31.50

Note: Data for 2016-17 are initial figures published by AG Punjab.

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State Finances
“…indicative of
2.23 A declining trend in the State’s Own Revenues and
systemic weaknesses
dependence on the Central Transfer of funds over the
and a suboptimal
period of ten years indicates a narrowing tax base, a
resource mobilization
contraction of charged Government services and non-
within the State…”
recovery of the economic cost of services. This is
indicative of systemic weaknesses and a suboptimal
resource mobilization within the State.
Figure 5: Own Tax Revenue Receipts (2016-17) (` crore)
CENTRAL TRANSFERS
2.24 The share of Central Taxes in total Receipts have

increased from 9.32 % (2006-07) to 21.14 % (2016-17)
indicating the State’s increasing dependence upon
Central transfers and devolution during the 10 year
period (Table 4). Also, the share of total Central
Transfers in Revenue Receipts has grown from 22.66%
(2006-07) to 31.50% (2016-17) as mentioned in
Table 5.

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State Finances
“…the transfer of
This trend of growing dependence on the Government
Grants in Aid from
of India for resources is also an indication of the lack of
Centre has
tax buoyancy within the State’s Own Tax Revenue
decreased from
streams and it needs to be addressed. However the
13.33% in 2006-07 to
10.36% in 2016-17…” transfer of Grants in Aid from Centre has decreased
from 13.33% in 2006-07 to 10.36% in 2016-17 (Table
4). The primary reason for this is the lack of the State
“…primary reason for to provide its part of the share in Central Schemes. As
this is the lack of the a result, the State has been unable to fully leverage the
State to furnish its
grants in aid from the Central Government.
part of the share in
Central Schemes…” Table 4: Share of Central Transfers (` crore)
Year Share of Grants in % of % of Grants

Central Aid from Central Tax in Aid to
taxes Centre to Total Total
Revenue Revenue
Receipts Receipts
1 2 3 4
2006-07 1566 2240 9.32 13.33
2007-08 1975 2109 10.27 10.97
2008-09 2084 1695 10.06 8.18
2009-10 2144 2320 9.68 10.47
2010-11 3051 2399 11.05 8.69
2011-12 3554 2441 13.55 9.30
2012-13 4059 2776 12.66 8.66
2013-14 4431 3401 12.62 9.69
2014-15 4703 5870 12.05 15.04
2015-16 8009 4174 19.29 10.05
2016-17 9600 4704 21.24 10.36


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State Finances
“…It may not be

Table 5: Total Revenue Receipts (` crore)
possible to influence
Year States Receipts Central Transfers Total
Revenue
Receipts
items like salaries,
(TRR)
Own Tax Non Tax Total % to Share Grants Total % to
pension and interest
Revenue Revenue State TRR of in Aid Central TRR
Receipt (3/9) Central Transfer (7/9) Expenditure. But it is
(1+2) Taxes (5+6)
1 2 3 4 5 6 7 8 9 a different case with
2006-07 9017 3973 12990 77.34 1566 2240 3806 22.66 16796
regard to Non Plan
2007-08 9899 5254 15153 78.77 1975 2109 4084 21.24 19238
2008-09 11150 5784 16934 81.75 2084 1695 3779 18.24 20713 Revenue Expenditure
2009-10 12039 5653 17692 79.85 2144 2320 4464 20.15 22157 net of Salaries,
2010-11 16828 5330 22158 80.26 3051 2399 5450 19.74 27608
Interest and
2011-12 18841 1398 20239 77.15 3554 2441 5995 22.85 26234
2012-13 22588 2629 25217 78.67 4059 2776 6835 21.32 32051 Pensions. This
2013-14 24079 3191 27270 77.78 4431 3401 7832 22.31 35104 component can be
2014-15 25570 2880 28450 72.91 4703 5870 10573 27.09 39023
modulated without
2015-16 26690 2650 29340 70.66 8009 4174 12183 29.34 41523
2016-17 27818 3286 31104 68.50 9600 4704 14304 31.50 45408 adverse impact on
development. What
Note: Data for 2016-17 are initial figures published by AG Punjab. has been its behavior
during the last ten
STATE EXPENDITURE years?…”
2.25 To understand the yawning Revenue gap as indicated

by the widening Revenue Deficit, and the consequent
crisis, one needs to examine both the Revenue and
Expenditure side of State finances. While examining
the growth in Revenue Expenditure, the trend in the
various components of the Expenditure needs to be
analyzed closely. It may be a truism that the
Expenditure has to be contained within the limits of
Revenue. It may not be possible to influence items like
salaries, pension and interest Expenditure. But it is a
different case with regard to Non Plan Revenue
Expenditure net of Salaries, Interest and Pensions. This
component can be modulated without adverse impact
on development. What has been its behavior during the
last ten years? This is the question that needs to be

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State Finances
“…State’s Revenue
REVENUE EXPENDITURE
Expenditure i.e.85%
of total Expenditure is
2.26 The most fundamental classification of the government
taken up by salaries,
Expenditure is Revenue and Capital Expenditure. All
interest payments
Expenditure that goes towards operation &
and pensions…”
maintenance, committed salary Expenditure and does
not create any assets is called Revenue Expenditure
“…If we add the and all Expenditure that creates long-term assets is
power subsidy and called Capital Expenditure. The purpose of Capital
Expenditure on Police Expenditure is to enhance the capacity of the economy
this together accounts to produce goods and services through public
for 107% of the
investment in infrastructure like roads, bridges, power
Revenue Receipts of
generation and distribution capacity, irrigation
the State….”
networks, transport, sewerage, water supply,
education, health, sports facilities, etc. In fact, Capital
outlays must increase constantly in order to meet the
growing infrastructure needs of a growing State like
Punjab that spur development, increase consumption
and thereby lead to greater tax Revenue for the State
and a better quality of living for the citizens.
2.27 In 2016-17, 85% of total Revenue Receipts were
incurred on salaries, interest payments and pensions. If
we add the power subsidy, this together accounts for
102% of the Revenue Receipts of the State. These are
committed liabilities of the Government that must be
met each year.
2.28 If the components of Expenditure for the period 2006-
07 to 2016-17 are analyzed, the Revenue Expenditure
has increased from 88% to 92% (Figure 6 & 7) of the
Total Expenditure.

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State Finances
“…The average
Figure 6: Components of Expenditure (2006-07; ` crore)
salary of the Punjab
Government
employees is much
higher as compared
to the other States
and even the
Government of
India…”
Figure 7: Components of Expenditure (2016-17; ` crore)
2.29 Salary Structure and Expenditure: The average

salary of the Punjab Government employees is much
higher as compared to the other States and even the
Government of India. No other State governments have
such onerous obligations like Government of Punjab.
On the other hand, the State spends merely 5.13% of
its Revenue Expenditure on medical and public health,
and 16.3% on general education.

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State Finances
“…the State spends

2.30 The State Government is spending approximately 9.1%
merely 5.13% of its
of its Revenue Expenditure as Expenditure on Police
Revenue Expenditure
and Jails which is significantly higher as compared to
on medical and public
larger States like Karnataka, Gujarat, Tamil Nadu,
health…”
Haryana, and Uttar Pradesh.
Figure 8: Components of Revenue Expenditure (` crore)

Note: Data for 2016-17 are initial figures published by AG Punjab

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State Finances
“…The total Revenue

2.31 Table 6 below shows the breakup of Revenue
Expenditure had been
Expenditure in the State on the major components viz.
higher than the total
Salaries, Pension and Interest and other Revenue
Revenue Receipts for
Expenditure. The trend in increase of the State’s
the decade under
Revenue Expenditure shows that the Revenue reference, thus
Expenditure has increased from `18544 crore (87.76% indicating that the
of total Expenditure) in 2006-07 to `52018 crore total Revenue
(92.18% of total Expenditure) in 2016-17 (an increase Expenditure has
of 180%). During the same period, Expenditure on grown faster than the
Salaries rose from `5783 crore to `19758 crore (an Revenue Receipts,
leading to an adverse
increase of 242%), on pensions from `1905 crore to
Revenue situation…”
`8749 crore (an increase of 359%) and on Interest from
`4152 crore to `10098 crore (an increase of 143%).
Thus the growing share of salary and pensions in its
Revenue Expenditure prevented the State from
achieving a Revenue surplus. With State’s borrowings
and debt growing over time as indicated in Table 6,
interest payments have also increased. The total
Revenue Expenditure had been higher than the total
Revenue Receipts for the decade, 2007-2017, thus
indicating that the total Revenue Expenditure has
grown faster than the Revenue Receipts, leading to an
adverse Revenue situation.

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State Finances
“…total Revenue
Table 6: Salaries, Pension and Interest Payments (` crore)
Expenditure has
Year Interest Pension Salaries Total Other Total
grown faster than the Payments Payments & Wages RE Revenue
Expenditure
Revenue Receipts, 1 2 3 4 5 6 (4+5)
(1+2+3)
leading to an adverse
2006-07 4152 1905 5783 11840 6704 18544
Revenue situation.”
2007-08 4527 2433 6438 13398 9664 23062
2008-09 4902 2830 6834 14566 10003 24569
2009-10 5011 3357 8225 16593 10815 27408
2010-11 5515 5309 9750 20574 12322 32896
2011-12 6280 5657 12403 24340 8705 33045
2012-13 6831 5966 14155 26952 12506 39458
2013-14 7820 6277 14862 28959 12681 41640
2014-15 8960 7249 16303 32512 14100 46612
2015-16 9782 7833 17437 35052 15022 50074
2016-17 10098 8749 19758 38605 13413 52018


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State Finances
“…Government did
Figure 9: Total Revenue Expenditure (2006-07; ` crore)
not exercise
adequate control on
Interest
Other Payments, avoidable
Revenue 4152, 23%
Expenditure...”
Expenditure,
6704, 36%
Pension
Payments,
1905, 10%
Salaries &
Wages, 5783,
31%
Figure 10: Total Revenue Expenditure (2016-17; ` crore)
Other Interest
Revenue Payments,
Expenditure, 10098, 19%
13413, 26%
Pension
Payments,
8749, 17%
Salaries &
Wages,
19758, 38%

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State Finances
“…If the State would

2.32 It is thus observed that even in areas where prudent
have maintained the
financial management would demand restraint and
same level of the
control; the previous Government did not exercise
growth in CAPEX in
adequate control on avoidable Expenditure. Evidently
the future, the State
could have been one of the factors that aggravated the financial crisis
among the best during the tenure of the previous Government has been
States in terms of its the failure to control avoidable Revenue Expenditure.
public
infrastructure…”
CAPITAL EXPENDITURE
2.33 The trend of CAPEX (Capital Expenditure) during 2006-

07 to 2016-17 is captured in the Table 7.
2.34 The share of Capital Expenditure has been showing a
declining trend over the years, from 12.24% in 2006-07
to 7.82% in the year 2016-17. The Expenditure had
fallen to as low as 4.61% in the year 2011-12. If the
State would have maintained the same level of growth
in CAPEX in the future, the State could have been
among the best States in terms of its public
infrastructure. But that was not to be….!
Figure 11: Revenue Deficit as % of GSDP (In %)
2.51 2.66 2.55

2.34 2.49
2.22 2.14 2.18
1.97
1.38

WHITE PAPER
State Finances
“…The State will now

Table 7: Share of Revenue and Capital Expenditure (` crore)
Year Revenue % of Total Capital % of Total
have to wait longer
Expenditure Expenditure Expenditure Expenditure for catching up with
1 2 3 4
advanced States and
2006-07 18544 87.76 2586 12.24
2007-08 23062 91.32 2192 8.68
that effort will now
2008-09 24569 89.58 2858 10.42 cost us more…”

2009-10 27408 92.68 2166 7.32
2010-11 32896 93.24 2384 6.76
2011-12 33045 95.39 1598 4.61
2012-13 39458 95.37 1916 4.63
2013-14 41640 94.98 2201 5.02
2014-15 46612 93.73 3118 6.27
2015-16 50074 94.24 3059 5.76
2016-17 52018 92.18 4412 7.82

2.35 Thus, one consequence of the Fiscal issues is that the

Capital Expenditure in the State has suffered hugely.
The State will now have to wait longer for catching up
with advanced States and such an effort will now cost
us more. This indicates that the policy stance has been
wavering and uncontrolled growth in Revenue
Expenditure came in the way of a sustained growth of
Capital Expenditure. On examining the rates of growth
of these Expenditures in the period under reference, the
growth of both Expenditures has been fluctuating
widely. Unfortunately, as explained in Chapter 6, the
Capital Expenditure incurred through off budget
resources was also largely on non-resource generating
assets, thus underlining poor planning and mis-
priorities in resource allocation of the previous
Government.

WHITE PAPER
State Finances
“…As per the

REVENUE DEFICIT
mandate of the 13th
Finance Commission,
2.36 The excess of Revenue Expenditure over Revenue
the State was to
Receipts is defined as a Revenue Deficit, while an
achieve a zero
excess of Revenue Receipts over Revenue
Revenue Deficit from
the year 2011-12 Expenditure is defined as a Revenue surplus. A
onwards…..” Revenue Deficit implies that the State Government

does not have sufficient funds to meet its committed
Expenditures, the gap is met through borrowings, and
accordingly fewer funds are available for productive
and Capital Expenditure.
2.37 Revenue Deficit has hit its worst in the last ten years. In
2006-07 the Revenue Deficit was `1749 crore.
However, this Deficit recorded more than two-fold
increase in the very first year of the previous
government coming into power i.e. 2007-08 at `3823
crore. It has since increased to `8550 crore in 2015-16
(Table 8) and the position is much worse in 2016-17 if
we take into account the pending liabilities also of
`13039 crore (Table 2) and initial figures for 2016-17
(Figure 11).
2.38 As per the mandate of the 13th Finance Commission,
the State was to achieve zero Revenue Deficit from the
year 2011-12 onwards, which has not been done. The
State lost out a priceless and historic opportunity to
catch up with the rest of the country in infrastructure
investment by lowering the Revenue Deficit and
increasing Capital Expenditure.

WHITE PAPER
State Finances
“…Fiscal Deficit of
Table 8: Trends in Revenue Deficit
`4384 crore was
Year Revenue (-) Deficit / Surplus Revenue (-) Deficit / Surplus
recorded in the year
(` crore) as % of GSDP *
2006-07, which has
2006-07 1749 1.38
2007-08 3823 2.51
increased by 168% to
2008-09 3856 2.22 `11762 crore in

2009-10 5251 2.66 2015-16…”
2010-11 5289 2.34
2011-12 6811 2.55
2012-13 7407 2.49
2013-14 6537 1.97
2014-15 7591 2.14
2015-16 8550 2.18

*Calculated on the basis of latest GSDP value provided by ESO, Punjab
FISCAL DEFICIT
2.39 The Fiscal Deficit means the excess of the total

disbursements from the consolidated fund of the State
(excluding repayment of debt) over total receipts
excluding the debt receipts during a financial year. A
declining Fiscal Deficit signifies a consolidation of the
resource position and sustainable functioning of the
Government. A Fiscal Deficit is usually financed by way
of borrowings by the State. Fiscal Deficit of `4384 crore
was recorded in the year 2006-07, which has increased
by 168% to `11762 crore in 2015-16 (Table 9). If loans
taken over by the State under UDAY scheme are
included the Fiscal Deficit comes to `17359 crore. This
trend indicates that the Government spending has been
increasingly financed by raising loans (Figure 12).

WHITE PAPER
State Finances
“…Fiscal Deficit Table 9: Trends in Fiscal Deficit

which was 3.02% of
Year Fiscal Deficit Fiscal Deficit as % of
GSDP in 2007-08 has (` crore) GSDP**
risen sharply to 2006-07 4384 3.45
4.25% in 2015-16. 2007-08 4604 3.02
This trend indicates 2008-09 6690 3.84
that the Government 2009-10 6170 3.12
spending is being 2010-11 7143 3.16
increasingly financed 2011-12 8491 3.18
by raising loans…”
2012-13 9346 3.14
2013-14 8790 2.65
2014-15 10842 3.05
2015-16* 11762 3.00
*Loans undertaken by the State Government under UDAY scheme is

considered then the Fiscal Deficit amounts to `17359 crore and the Fiscal
Deficit as % GSDP will be 4.25%.
**Calculated on the basis of latest GSDP value provided by ESO, Punjab
Figure 12: Fiscal Deficit as % of GSDP (In %)

WHITE PAPER
State Finances
“…It clearly shows

2.40 A comparison of the Revenue Deficit and the Fiscal
that though the State
Deficit during the year 2006-07 and 2015-16 would
had larger Fiscal
reveal that while the Revenue Deficit was at 1.38% of
Deficit at the end of
the GSDP at the end of financial year 2006-07, it was
the year 2006-07 but
2.18% at the end 2015-16 (Table 8). The corresponding the Revenue Deficit
figures for the Fiscal Deficit are 3.45% and 3% was very less and,
respectively (Table 9). No doubt, the Fiscal Deficit at therefore, the State
the end of the year 2006-07 was more than 3%, but at Government could
same time the difference between Revenue Deficit and spend money on the
Fiscal Deficit was 2.07% as against mere 0.82% of Capital and
GSDP at the end of financial year 2015-16. It clearly development

projects…”
shows that though the State had larger Fiscal Deficit at
the end of the year 2006-07 but the Revenue Deficit
was very less and, therefore, the State Government
had spent funds on the Capital and development
projects. Correspondingly, during the year 2015-16,
there was very little money left to spend on the
development Expenditure after increased Revenue
Expenditure.
STATE DEBT LIABILITIES - OUTSTANDING DEBT
2.41 Debt Liabilities of the State inter-alia consist of Internal

Debt of the State, Loans and Advances from
Government of India and Public Account Liabilities. As
the Tax Revenues are not able to finance the State’s
entire Expenditure, over the years there has been a
growing dependence on public debt as a major source
of financing Government’s Expenditure. The main
sources are:
1. Open Market Borrowings (OMB)

2. National Small Saving Fund (NSSF)

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State Finances
“…over the years 3. NABARD

there has been a 4. Government of India
growing reliance on 5. International Financial Institutions
public debt as a major 6. Commercial banks and other FIs
source for financing
7. Ways and Means Advances (WMA)
Government’s
8. Public Account
Expenditure…”
Table 10: Outstanding Debt to Total Revenue Receipts (` crore)
Year Outstanding Debt Total Revenue Outstanding Debt as %GSDP
Receipts (TRR) Debt as
% of TRR
2006-07 51155 16795 305 40.24
2007-08 55982 19238 291 36.77
2008-09 61850 20713 299 35.54
2009-10 67971 22157 307 34.42
2010-11 74777 27608 271 33.06
2011-12 83099 26234 317 31.17
2012-13 92282 32051 288 30.99
2013-14 102234 35104 291 30.78
2014-15 112366 39023 288 31.66
2015-16 129441 41523 312 33.06
2016-17 148832* 45408 328 31.60

* Doesn’t include the other debts as indicated in Table 14(Total Debt)
Table 11: Outstanding Debt and Expenditure on Debt Servicing (` crore)

Year Net Interest Repayment Debt Debt
Borrowings Payments of Loans Servicing Servicing
(Interest + As % of
Repayment) TRR
2006-07 -494 4152 1399 5551 33.05
2007-08 4579 4527 1719 6246 32.47
2008-09 4864 4902 1835 6737 32.53
2009-10 5648 5011 2283 7294 32.92
2010-11 6159 5515 2340 7855 28.45
2011-12 7564 6280 2675 9216 35.13
2012-13 8616 6831 3674 10505 32.78
2013-14 9422 7820 3650 11470 32.67
2014-15 9884 8960 3214 12174 31.20
2015-16 17486 9782 3830 13612 32.78
2016-17 16730 10098 4047 14145* 31.15*

*This figure is likely to increase sharply in 2017-18 on account of increased additional Debt
Servicing of `3240 crore per annum on account of the clean term loan taken for the CCL of food
account in March 2017.

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State Finances
2.42 The growth rate of the debt obligations over the period “...The huge
as depicted in the Table 10, has risen from `51155 crore Outstanding Debt of
in 2006-07 to `148832 crore in 2016-17. Though the the State pre-empts

significant resources
growth in Debt as percentage of GSDP has decreased
of the State for debt
from 40.24% to 31.15% (*doesn’t include other debts as
servicing…”
mentioned in Table 14), but the underneath truth about the
corresponding growth in terms of GSDP in the same
period has been hidden also this figure is likely to increase
sharply in 2017-18 on account of increased additional
Debt Servicing of `3240 crore per annum on account of
the clean term loan taken for the CCL of food account in
March 2017. The growth in GSDP has been more than
two-fold and has risen from `127123 crore in 2006-07 to
`427870 crore in 2016-17 (237%), meaning thereby, that
while the people of the State have worked hard to increase
the GSDP of the State, the government has mismanaged
its finances increasing its debt stock.
2.43 The huge outstanding debt of the State pre-empts
significant resources of the State for debt servicing. The
total debt servicing Expenditure in 2016-17 was `14145
crore (Principal `4047 crore and Interest Payment
`10098 crore – Table 11). This figure is likely to increase
by 30% in 2017-18, on account of the increased debt
liabilities of `29919.96 crore that the previous State
government accepted in exchange for concealing the
mismanagement of the food sector.

WHITE PAPER
State Finances
“…Borrowing to
2.44 As borrowings have increased over the years, the
finance present
Government is also borrowing to repay old debts as is
consumption
evident from Table 11. In the past ten years, the
represented by non-
Government has used borrowings as a source of funds
plan Revenue
Expenditure…”
to meet a part of its committed Expenditure, which is
not a healthy sign. Borrowing by the Government is not
undesirable per se, but these borrowings must be
deployed largely for Capital Expenditure on resource
generating assets as well as on social infrastructure for
the debt to be sustainable in the long term. However,
the trend of borrowings to finance present consumption
represented by Revenue Expenditure is unsustainable
in the long term as it does not produce future streams
of income and still needs to be repaid.
2.45 Informal Debt: The informal debt is the amount of loans

raised by the government internally from State Agencies.
The State has taken these loans from the State agencies/
boards for meeting its Expenditure needs. This is in a
way circumventing the provisions of the FRBM Act since
this debt is never reflected in the accounts of the State
Government. The details of funds borrowed through
agencies for the year 2016-17 is depicted in Table 12.
Table 12: Borrowing from Agencies (2016-17; ` crore)
Source of Debt Debt

PIDB 1125
PunGrain 250
Housing & Urban Development 250
PUDA 2000
Advance taken from Food Agencies to pay EMI’s (3 months) 810
Total 4,435
Source: (Concerned Departments)
Note: the State government is paying no Interest on these debts.

WHITE PAPER
State Finances
2.46 Another discernible aspect is that the previous “…The informal debt
government had forced agencies and organizations of is the amount of loans
the State like PIDB, PUDA, GMADA, RDB etc. to incur raised by the
government internally
huge debt liabilities and fund Expenditures (many a times
from State Agencies,
outside their mandate and mainly on non-resource
which was `4435
generating assets) that should ordinarily be carried out
crore in 2016-17…”
by the State. These Expenditures were neither presented
for the sanction of the Punjab Vidhan Sabha nor were
these subject to the audit of the CAG. This aspect is
being dealt separately in detail in subsequent pages.
CONTINGENT LIABILITIES & STATE GUARANTEES
2.47 Contingent Liability though, not an obligation to pay

unless a certain discrete event(s) occurs and therefore
often referred to as off-balance sheet liability.
Contingent liabilities can be explicit or implicit. Explicit
liability means specific obligations of the government
that is established by law or a contract authorized by
law. Implicit liability implies moral obligation or expected
responsibility usually recognized after an event or
condition is realized. These include: default of
municipalities, bank failure (bail-out), deposit
insurance, failure of a non-guaranteed pension fund,
natural disaster relief, etc. The guarantee commitments
of State Government in respect of State public sector
enterprises (SPSEs) are, in fact, a major source of
potential risk to Fiscal and debt sustainability at the
State level in general and in particular where SPSEs
have accumulated huge losses and debt liabilities.

WHITE PAPER
State Finances
“…due to poor
2.48 Various Public Sector Undertakings carry out projects
recovery of and non-
for public interest. Sometimes these projects require
contribution to the
financing for which they approach financial institutions.
guarantee redemption
fund has put the State Usually financial institutions demand Government
Fiscal to a great guarantee as a collateral security. Financial
risk…” Institutions/banks reduce the rate of interest on the
loans if government extends guarantee for the projects.
2.49 The Government guarantee is extended for the long
term as well as short term loans. According to FRBM
Act, there is a cap on extending guarantee on long term
loans which is 80% of the total Revenue Receipts of
previous year. Government also charges a guarantee
fee @ 0.5% on the loan amount if loans are repayable
within 1 year, 1% on the loan amount if loans are
repayable within 3 years and 2% on the loan amount if
loans are repayable after 3 years.
In terms of the 12th Finance Commission
recommendations, the State introduced the “Guarantee
Redemption Fund Scheme” with an objective to meet
its obligations arising out of the Guarantee extended to
State level entities, so that this guarantee money
should create a sinking fund to provide for the
contingencies. Accordingly over the period 2013-14 to
2015-16, the State was required to contribute minimum
amount of `1241.58 crore (Finance Accounts 2015-16
AG Punjab). However, poor recovery and non-
contribution to the guarantee redemption fund, has put
the State Fiscal to a great risk, and the State
Government is now forced to bailout some of the
SPSEs who had borrowed using State Guarantees.

WHITE PAPER
State Finances
“…poor recovery and

Table 13: Government Guarantees as on 31st March 2017
non-contribution to
1. Total Revenue Receipts for the `45407.76 crore the guarantee
year 2016-17
redemption fund, has
put the State Fiscal to
2. Permissible Guarantee Limit `36326.20 crore
(calculated @ 80% of the a great risk, and the
Revenue Receipts of the State Government is
previous year)
now forced to bailout
3. Total long term loans `20608.17 crore
some of the SPSEs
outstanding against govt.
guarantees as on 31.03.2017 who had borrowed
using State
4. Balance amount available for `15718.03 crore Guarantees…”
guarantees
Source: (Collected from respective PSUs)
2.50 While the above figures may look healthy indicating a

cushion for the State government to provide guarantees
for debt that its enterprises may raise, the truth is that
the guarantees provided earlier to PSPCL and the food
agencies have now been converted to State debt as a
result of the UDAY scheme and the loan takeover on
account of CCL of food agencies by the State
government. The long term loan raised by the State
Government to settle the legacy CCL accounts of food-
grains amounting to `29919.96 crore have also been
taken apart from `15628 crore under UDAY Bonds.
This all adds up to `187452.96 crore (44% of
GSDP). Taking altogether, the total debt including
guarantees comes to `208060.96 crore which
constitutes 49% of GSDP (Table 14). However, as per
the 14th Finance Commission recommendations, the
outstanding debt as % of GSDP is required to be 25%
during 2015-16 to 2019-20.

WHITE PAPER
State Finances
“…This all adds up to Table 14: Total Debt as on 31st March 2017 (` crore)
`187452.96 crore
Sr. No. Particulars Amount
(44% of GSDP).
Taking altogether, the 1. Outstanding Debt (including UDAY
148832.00
Bonds for 2015-16 & 2016-17)
total debt including
2. Informal Debt 4435.00
guarantees comes to
3. UDAY Bonds (for 2017-18) 4266.00
`208060.96 crore
which constitutes 4. Cash Credit Limit for Food grains
29919.96
Procurement
49% of GSDP…”
5. Total Debt (1 to 4) (A) 187452.96
6. Outstanding Guarantee 20608.00
“…However, as per 7. Total Debt + Guarantee (5+6) (B) 208060.96
the 14th Finance

Commission A. Total Debt = `187452.96 crore
recommendations, GSDP = `427870 crore
the outstanding debt DEBT/ GSDP = 44%
as % of GSDP is B. Total Debt & Guarantee = `208060.96 crore
required to be 25% GSDP = `427870 crore
during 2015-16 to (DEBT+Guarantee)/GSDP = 49%
2019-20...”
2.51 All this becomes more relevant when the budgeted

Revenue Estimates are far behind the actual receipts.
The shortfall between the actual receipts and the
budgeted Revenue Receipts has been `2009 crore in
2010-11, `7562 crore in 2013-14 and `4773 in 2016-
17 (Table 15). At the same time, the gap between the
actual Capital Expenditure and the budgeted estimates
has been much higher. This was as high as 70.51% in
2011-12 and 69.78% in 2013-14. However, it has been
observed that the actual Capital Expenditure was
higher than the budgeted Capital Expenditure only in
2006-07 (Table 16).

WHITE PAPER
State Finances
“…the budgeted
Similarly, the actual Expenditure against the budgeted
Revenue estimates
estimates on plan allocations was 143.80% of the
are far behind the
approved outlay in 2006-07, whereas the same has
actual receipts…”
since been decreasing over the subsequent years. In
the year 2009-10, this ratio declined drastically to
57.67%, which is the lowest in 10 years (Table 17).
Table 15: Revenue Receipts - Actual v/s Budgeted (` crore)
Year Budget Actual Shortfall %

Estimates shortfall
2007-08 23160 19238 3922 16.93
2008-09 24261 20713 3548 14.63
2009-10 26072 22157 3916 15.02
2010-11 29617 27608 2009 6.78
2011-12 32027 26234 5792 18.09
2012-13 38043 32051 5992 15.75
2013-14 42666 35104 7562 17.72
2014-15 44894 39023 5871 13.08
2015-16 46229 41523 4706 10.18
2016-17 50181 45408 4773 9.51
Note: Data for 2016-17 are initial figures published by AG Punjab

WHITE PAPER
State Finances
“…the actual
Table 16: Capital Expenditure- Actual v/s Budgeted (` crore)
Expenditure against
Year Budget Actual Shortfall %
Estimates shortfall the budgeted
2006-07 2376 2586 -210 -8.83

estimates on plan
allocations was
2007-08 4174 2192 1982 47.49
143.80% of the
2008-09 3483 2858 625 17.94
approved outlay in
2009-10 3550 2166 1384 38.98 2006-07…”
2010-11 3062 2384 678 22.14
2011-12 5418 1598 3820 70.51

“…In the year 2009-
2012-13 5815 1916 3899 67.06 10, this ratio declined
2013-14 7283 2201 5082 69.78 drastically to 57.67%,
2014-15 6066 3118 2948 48.60 which is the lowest in

10 years...”
2015-16 4857 3059 1797 37.01
2016-17 4804 4412 392 8.16
Table 17: Plan Outlay - Actual v/s Budgeted (` crore)
Year Approved Actual % of Approved

Outlay (BE) Expenditure Outlay
2006-07 4000.00 5751.83 143.80
2007-08 5111.00 5024.09 98.30
2008-09 6210.00 6925.00 111.52
2009-10 8625.00 4973.78 57.67
2010-11 9150.00 8325.00 90.98
2011-12 11520.00 7457.00 64.73
2012-13 14000.00 9684.90 69.18
2013-14 16125.00 11808.37 73.23
2014-15 20099.83 15030.03 74.78
2015-16 21173.90 20096.40 94.91

WHITE PAPER
State Finances
“…the Expenditure
CONCLUSION
has been postponed
while the receipts had
2.52 From the above, it is clear that the budgets have not
been fast-forwarded
been prepared very realistically. While the budget
through escrowing
estimates on the receipt side have been exaggerated
future Revenues …”
year after year as mentioned in Table 15, at the same
time the actual receipt has been decreasing as
compare to budgeted figures. Moreover, the
Expenditure has been postponed while the receipts had
been fast-forwarded through escrowing future
Revenues while incurring debt and leaving huge unpaid
liabilities in the treasury for the coming year.

WHITE PAPER
State Finances
Page | 58 Chapter 3: Liability Of Cash Credit Limit For Food Grains

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State Finances
LIABILITY OF CASH CREDIT LIMIT FOR

FOOD GRAINS
Chapter 3

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State Finances

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State Finances
LIABILITY OF CASH CREDIT LIMIT FOR FOOD GRAINS

Chapter 3
3.0 Punjab is the major contributor of food grains towards

Central Pool in the country, contributing about 40% of the
nation's requirement. Procurement of more than 250 Lakh
metric tonnes of food grains is undertaken in Punjab
through State Procuring Agencies and FCI every year.
3.1 In Punjab, Wheat & Paddy is procured in a short span of
“…The procurement about 30 days during the season in about 1800 mandi
of wheat and paddy is yards. Processed rice is delivered in a time span of about
made under Price 4-5 months from about 3200 rice millers in the State. The
Support Scheme procurement of wheat and paddy is made under Price
(MSP) of
Support Scheme (MSP) of Government of India and the
Government of India
finances for carrying out the same are made available by
and the finances for
way of Cash Credit Limit authorized by Reserve Bank of
carrying out the same
India through State Bank of India and the consortium
are made available by
bankers. State Government procures food grains through
way of Cash Credit
its five State Procuring Agencies (SPAs), on behalf of
Limit authorized by
Reserve Bank of Government of India.
India through State 3.2 Before the start of every procurement season, a
Bank of India and the “provisional cost sheet” is issued by Department of Food &
consortium Public Distribution (DFPD), Government of India, based on
bankers...” norms introduced first by Department of Food & Public
Distribution, Government of India in 2003, on the basis of
which FCI makes payment of delivered food grains to State
Procuring Agencies.

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State Finances
“…Government of
3.3 The Provisional Cost Sheet comprises items such as MSP,
India used to
Statutory Charges and Taxes, Labour Charges,
reimburse the actual
Transportation & Handling Charges, Custody &
expenditures on
Maintenance Charges, Interest Charges, Milling Charges,
procurement
Administrative Charges and Cost of Gunny Bags. However,
incidentals in lump-
sum manner and the actual costs incurred by the SPAs during procurement
never used to call for operations, except MSP & Statutory Charges and Taxes,
the audited are invariably more than what is provided for in the
accounts...” provisional cost sheets. Each crop's provisional cost sheet
is required to be finalized on the basis of audited Final
Accounts of the SPAs. The actual procurement expenses
incurred by SPAs, except MSP, Statutory Charges & Milling
Charges, are partially reimbursed by the FCI based on the
provisional cost sheet issued by the Government of India.
The payment of actual Procurement Expenses is made by
SPAs from the CCL account only, as the SPAs have no
other source of funds for procurement operations.
3.4 Prior to 2003-04, Government of India used to reimburse

the actual expenditures on procurement incidentals in lump-
sum. However, from 2003-04 onwards it was decided that
the difference between the actual expenditure and
provisional cost sheet would be reimbursed on the
submission of audited accounts duly audited by statutory
auditors and CAG. Since the lifting of the food grains by the
FCI procured by the SPAs used to take 2 to 3 years, as
such the audited accounts could not be submitted to
Government of India. However, the duly audited accounts
of 2003-04 were submitted to Government of India from
2009 onwards in a phased manner and Government of
India started processing such accounts from 2011.

WHITE PAPER
State Finances
“…The gap between

3.5 It is pertinent to note that in-spite of settling the
the outstanding CCL
accounts as per the audited expenses, the Government
and the stocks in
of India did not reimburse the entire claim of expenses
hand has been
incurred on procurement of food grains by the State increasing gradually
Procuring Agencies. Due to non-reimbursement of the in the past…”
actual expenses of each crop, the gap has been
increasing with the application of compounded interest,
besides non-settlement of other critical issues. The
State Government did not make any budgetary
provision for adjustment of such a gap, which has now
been made by the State during KMS 2015-16, whereby
the State has deposited `926 crore for the adjustment
of KMS 2015-16 accounts. The gap between the
outstanding CCL and the stocks in hand has been
increasing gradually in the past. The current Bank
outstanding as on 31.3.2017 in the Food Credit Account
(without taking into account the available stocks of food
grains with SPAs) is `29919.96 crore.
3.6 For arrangement of funds for procurement operations,

the State Government approaches the RBI for
authorization of Cash Credit limit, to be availed through
SBI, which is the lead bank of the Food Credit
Consortium. The CCL and interest accrued thereon
should in the normal course be fully adjusted as and
when food grains are lifted by the Food Corporation of
India and its reimbursement is made by them. However,
no account could be shown to be fully adjusted after the
delivery of grains to FCI of the same crop since
inception up to 2014-15 (i.e. the Legacy period).

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State Finances
“…The provisional
3.7 It is also an admitted fact that the accounts of the
cost sheet never
previous crop accounts used to be adjusted by the
matched the actual
Bank from the receipts of the next crop CCL, leaving
expenses incurred by
gap holes in adjustment of the current crop account,
the State for the
procurement of
and this cycle has unfortunately continued for the
concerned crop…“ period of the legacy accounts. As a result, it was never

clear either to the SPAs or the Bank as to the
adjustment of that particular crop year, as inflows of
future crop seasons used to be appropriated by the
Banks to adjust interest accumulations of previous year
accounts, and no attempt was made by the Bank/
Government of India, which releases the provisional
cost sheet for each crop, to clear the accounts of a
particular Food season for which CCL was sanctioned.
The provisional cost sheet never matched the actual
expenses incurred by the State for the procurement of
concerned crop. Even the method of ‘valuation of
stocks’ issued by the Reserve Bank of India is not
accurate and requires amendments. On this subject,
State Government has taken up the matter with
Government of India from time to time, but no change
in the valuation norms has been carried out so far.
3.8 If the reasons for spiraling legacy accounts are
analyzed, it becomes evident that it is mainly due to
non-rational and faulty Principles of Procurement
Incidentals, leading to a huge gap on account of
difference in rates in provisional cost sheet and the
actual expenses, compounded by burgeoning interest,
besides some other unresolved issues like:

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State Finances
“…Non-
a. Carry over charges on stock in hand;
reimbursement of
b. Reimbursement of loss suffered by the State agencies
difference between
on disposal of damaged/ rejected wheat stocks of crop
simple interest paid
1995-96 till 2003-04; by the Government of
c. Non-payment of interest on I.D. Cess differential and India in incidental
Purchase Tax; charges, and
d. Interest of delayed payments by FCI and penal interest compounded interest
1999-2000 to 2001-2002; being charged on
e. Non-reimbursement of handling and transport charges quarterly /monthly
on wheat exported directly by the State Agencies; basis from the year
1997-98 to 2000-
f. Non-reimbursement of losses suffered by the State due
01...”
to open-market sale of paddy in crop year 1994-95 (as
per Government of India instructions);
g. Non-reimbursement of difference between simple
interest paid by the Government of India in incidental
charges, and compounded interest being charged on
quarterly /monthly basis from the year 1997-98 to 2000-
01;
h. Unilateral deductions carried out by FCI based solely
on CAG audit paras of FCI;
i. Non-inclusion in the stock Statements of receivables
against delivery of food grains, for the purpose of
calculation of drawing power of the account;
j. Time period involved in finalization of incidental
charges as reflected in the Final Cost Sheet;
k. Method of valuation of stocks, as per norms fixed by the
RBI, leading to a sharp decreased in valuation of
balance stock;
l. Delay in taking over of the stocks by FCI;
m.Delay in movement of stocks by FCI out of the State of
Punjab;

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State Finances
“…The claims of
n. Non-payment of interest on delayed payments by FCI
actual expenses for
even after taking over of stocks.
the year 2003-04
were not submitted to
Government of 3.9 Historically speaking, the gap in Food Credit Account
India till 2009…” as on 31-10-2004 was `8160.92 crore. At that time, the
Department of Food Supplies, Government of Punjab
which was authorized to procure food grain with four
other SPAs, stopped procurement of food grains on its
own account, so as to avoid the gap in CCL on
government account, but the gap in CCL accounts of
the procurement agencies continued even after the
conversion of `4545 crore of outstanding of the Food
Department account from CCL to term loan in the year
2004. The term loan along with interest was regularly
repaid by the State Finance Department, but the gap of
SPAs continued and has been continuously increasing
year after year as the core issues of gap could not be
conceptualized and quantified, because the actual
implication of change in procurement principles could
not be recognized in the absence of final claims. The
claims of actual expenses for the year 2003-04 were
not submitted to Government of India till 2009 and
DFPD, Government of India, started processing these
claims in January 2011. The State Government has
started submitting claims after completion of the
balance sheets year by year. However, the
Government of India did not reimburse the entire
expenses and also declined to pay interest which SBI
was charging on the difference of actual and provisional
expenses.

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State Finances
“…All the policy

3.10 From RMS 2015-16, the accounts of the Food Credit
issues and pending
were ‘ring-fenced’ on the request of Government of
issues were
Punjab, as to understand the reasons for formation of
discussed in detail in
the seasonal gap. After proper ring-fencing of CCL
the meeting of 5
account, the Government of Punjab was able to members Joint
showcase the reason and causes of the gap in CCL. Committee
There was a gap of about `2200 crore in CCL account constituted by PMO
of KMS 2015-16. Out of `2200 crore, `1100 crore was on 27.08.2015…”
due to diversion of funds by SBI on account of interest

adjustment on previous year CCL accounts, and a gap
of about `1100 crore was present on account of the
difference in actual expenses and the provisions as
contained in the provisional cost sheet issued by DFPD
on the basis of extant Principles of Procurement
Incidences (PPI) norms.
3.11 Considering the situation, the Government of India
advised Government of Punjab to make a budgetary
provision for the gap amount so as to stop further
increase in gap and to stop the recurring interest
burden. Acting on the advice of Government of India,
the Finance Department has released an amount of
`926 crore to square up the gap in CCL account for
KMS 2015-16. Further, the State Finance Department
has made a budgetary provision of `1100 crore in the
year 2016-17 to temporarily plug any gaps in the KMS
2016-17, so as to avoid interest burden, and ensure
repayment to Bank.
3.12 The policy and pending issues were discussed in detail
in the meeting of the 5 members Joint Committee
constituted by PMO on 27.08.2015, and the Joint
Committee gave its report on 22.02.2016.

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“…The problem of Although the Joint Committee was set up by the PMO,
gap is accentuated
the reports of its recommendations were never sent to
further by interest
the PMO for appraisal or concurrence, even though
accumulation.”
huge liabilities of both the Government of India and
Government of Punjab were in contention, and the
DFPD proceeded to take suo-moto action on the report
at its own level. The Committee had recommended in
Chapter 9 of its Report to re-examine some issues of
the Government of Punjab. Further, some policy issues
were conceded in favour of the State Government,
however the Committee observed, perhaps
erroneously, that at this point of time these issues can
be settled with prospective effect only and thus, the
problem remained as such.
3.13 It is pertinent to mention that the DFPD has over time

partially amended some of the PPIs (Principles of
Procurement Incidentals), but many others are still
required to be suitably amended as requested by
Government of Punjab from time to time. Despite these
amendments, the food procurement operations by the
SPAs remain a loss making venture/operation. No doubt
that State is getting several taxes on procurement of food
grains. The difference between the actual costs incurred
in procurement operations, and the costs reimbursable
as per the PPIs as contained in the Provisional Cost
Sheet is the main reason of losses to the State Agencies.
The problem of gap is accentuated further by interest
accumulation. There is an urgent need for rationalization
of PPI so as to ensure equitable reimbursement of actual
expenses during food procurement operations.

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State Finances
“….the State
3.14 It may be appraised that the entire burden of settlement
Government
of outstanding accounts couldn’t have been put
requested the
squarely on Punjab Government without any
Government of India
contribution coming from Government of India or the to extend one time
Banks. However, the previous government accepted grant-in-aid of
the same, burdening the citizens with a huge debt. `10000 crore and,
3.15 As the procurement season for paddy (KMS 2016-17) pending settlement of
was arriving and the State Government was finding it the claims of the
extremely difficult to get CCL from the Banks and to State agencies.”
keep the procurement operations smooth, the State

Government held detailed discussions with the
consortium of banks led by SBI and decided to go for
short term loan purely as a stop gap arrangement. To
sort out the problem in the long run, the State
Government requested the Government of India to
extend one time grant-in-aid of `10000 crore and,
pending settlement of the claims of the State Agencies,
the balance will be taken care of State Government by
raising money by floating bonds. After detailed round
of discussions the following terms and conditions were
mutually agreed with the Bank.

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State Finances
Tab le 18: Terms o f Ag reement o f CCL

S r. No. P aramet er T erm s of San ct ion
1 Amount 31,000 core (approx. outstanding of the legacy accounts as on dat e of

c ommenc em ent)
2 Tenure 20 Years
3 Repayment Equated Half yearly installments, first falling due on 31st Jan 2017 and thereafter at
the end of every six months. This was subsequently changed to monthly (EMI)
4 Repayment Half yearly installment amount including interest and Principal i.e. ` 1615 crore
Frequency/
Installment Amount
5 Interest Rate 8.25% p.a. (Fixed ) monthly rests not linked to MCLR
6 Interest Reset Fixed Rate not linked to MCLR, interest rate if subject to review at the end of each 5
years.
7 Credit (i) Government of Punjab to irrevocably authorize Government of India to deduct, in

Enhancement case Government of Punjab fails to make any payment towards principal or interest
on due dates. Such defaulted amount from the net small savings collections or (on
share in central taxes and normal central assistance in that order of priority and pay
the same to consortium
( ii) Government of Punjab shall also ensure that Government of India issues a
Comfort letter to lenders in this regard
(iii) In the event of default on the part of Government of Punjab to pay any
installment on due date a demand may be made on Government of India under
intimate to Government of Punjab for payment of defaulted amount
8 Security Suitable security documents to be executed by authorized and empowered official of

Documentation Government of Punjab. It would be incumbent upon Government of Punjab to
secure and obtain all the in-house / legislative approvals in this respect.
9 RBI dispensation The following one-time consideration would be requested from the Regulators. The
exposure will not be treated as Restructured due to –
(a) conversion of the existing out standings into clean term loan
(b) providing finer pricing
10 Government of Approval would be sought from Government of India regarding the arrangement
India Approval (credit enhancement)
11 Government of Government of Punjab would make available its unconditional consent to the
Punjab Consent arrangement, including the credit enhancement proposed, before the disbursement
of CTL.
12 Penalty No penalty would be chargeable for prepayment or accelerated payment of the

exposure
13 Pre-Payment Any Payment received from Government of India/ FCI/ liquidation of stocks will be
adjusted for reduction of out standings without impacting the installments which are
due and payable. Bank shall have the right to adjust such prepayment in such other
manner as decided in the standing committee.
14. Other Conditions Government of Punjab Shall Seek fresh disbursement from Banks only after
compliance of the above conditions.
RBI approval is a pre-condition for the disbursement of CTL

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State Finances
“…in case
3.16 For availing a Clean Term Loan, a request was made
Government of
to the Government of India for getting necessary
Punjab fails to make
approval as per FRBM Act under article 293(3) of
any payment towards
Constitution of India. While the necessary approval was
principal or interest of
awaited, in the meantime, State Bank of India submitted the Clean Term Loan
Clean Term Loan agreement to be signed before the on due dates, such
31.12.2016 to avoid the slippage of these accounts in defaulted amount
NPA; the same was signed on 31.12.2016, pending shall be deducted
approval of Government of India. from Government of
3.17 The Government of India issued its consent on Punjab’s Share in

Central Taxes”
02.01.2017 stipulating as follows: “Government of
Punjab shall approach Budget Division, Department of
Economic Affairs, for executing a tripartite agreement
between Government of India and RBI, irrevocably
authorizing the Government of India to deduct, in case
Government of Punjab fails to make any payment
towards principal or interest of the Clean Term Loan on
due dates, such defaulted amount shall be deducted
from Government of Punjab’s Share in Central Taxes
and pay the same to SBI consortium”.
3.18 In compliance of the conditions in the consent, a
Tripartite agreement received from the State Bank of
India was sent to the Government of India. Further,
Government of Punjab made request for amendment in
the Terms and Conditions in the Clean Term Loan on
06.01.2017 detailing as follows:
a. Actual amount of disbursement would be about
`30583.41 crore against the sanction of `31000
crore. Accordingly the amount of installment may
be refixed as per actual amount.

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State Finances
“…Banks have b. As the amount of installment is very huge, the installment

agreed for EMI @ on monthly basis instead of half-yearly basis may be
`270 crore and made. While doing so, due credit may be given to State
converted the legacy Government due to early payment of installments.
CCL accounts to
c. As the Banking Industry has reduced the lending rate by
Clean Term Loan. As
0.9% after demonetization, the rate of Interest on Clean
regards the reduction
Term Loan was required to be reduced further from
in rate of interest, the
8.25% to 7.35%.
Banks are yet to
agree...”
3.19 In this regard, meeting was held with State Bank of

India on 21.01.2017 at New Delhi with consortium of
Banks, on 27.01.2017 with standing committee of the
consortium and Reserve Bank of India for discussion
on the request of Government of Punjab. In this
meeting consortium of banks agreed to above, subject
to the approval of Reserve Bank of India.
3.20 Subsequently, Banks have agreed for EMI @ `270
crore and converted the legacy CCL accounts to Clean
Term Loan. As regards the reduction in rate of interest,
the Banks are yet to agree.

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State Finances
“…It is shocking to
CONCLUSION
know that this was
done, even without
3.21 Despite being the granary and food bowl of the nation,
the elementary
the State has been incurring huge losses in procuring
precaution of going
food grains on behalf of the Government of India and
into the reasons for
ensuring food security of the nation. On account of
the emergence of
such a huge gap and ineffective presentation of the State’s claims by the then
fixing responsibility of Government, the citizens of the State have been
the concerned burdened with an additional debt of `29919.96 crore
officials of the state implying an additional annual debt servicing liability of
procurement `3240 crore which would have otherwise been used to
agencies. The alacrity
build social and physical infrastructure. It is shocking to
with which this was
know that this was done, even without the elementary
done not only
precaution of going into the reasons for the emergence
provided a convenient
of such a huge gap and fixing responsibility of the
cover to the various
concerned officials of the state procurement agencies.
acts of malfeasance,
but the urgency to The alacrity with which this was done not only provided
recover the due a convenient cover to the various acts of malfeasance,
amount from the but the urgency to recover the due amount from the
Government of India Government of India and the opportunity to strike a fair
and the opportunity to bargain with them and the banks was also lost. The
strike a fair bargain then Government also agreed to square-up any gap
with them and the
between the outstanding CCL and value of stock that
banks was also
might emerge in the future as well. This is against the
lost…”
cardinal principle of the Centralized Procurement
Scheme that the State Procuring Agencies being
agents of the Government of India are neither to make
any profit nor to incur any loss in the procurement
operations and the Government of India is expected to
reimburse all bona fide cost of procurement incurred by
them.

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Page | 74 Chapter 4: Financial Burden On Account Of Uday Scheme

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FINANCIAL BURDEN ON ACCOUNT OF

UDAY SCHEME
Chapter 4

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FINANCIAL BURDEN ON ACCOUNT OF UDAY SCHEME

Chapter 4
UJWAL DISCOM ASSURANCE YOJANA (UDAY)
4.0 Ministry of Power, Government of India notified a scheme

for financial turnaround of power distribution companies
(DISCOMs) in 2015 with an objective to improve the
operational and financial efficiency of the State DISCOMs.
“…The Borrowings Memorandum of Understanding (MOU) amongst Ministry of
made by the state to Power, Government of India, Government of Punjab and
takeover PSPCL debt Punjab State Power Corporation Limited (PSPCL) was
during 2015-16 and signed on 04.03.2016, containing the following:
2016-17 shall be a. Out of the total outstanding debt of PSPCL of
utilized by
`20837.68 crore on 30.09.2015, state was to take over
Government of
`15628.26 crore (75% of total debt on 30.09.2015) in
Punjab solely for the
two years i.e. 50% of the outstanding debt (`10418.84
purpose of
discharging the crore) in 2015-16 and 25% of the outstanding debt
PSPCL debt and (`5209.42 crore) in 2016-17. For the remaining 25% of
transfer to PSPCL as debt (`5209.42 crore), PSPCL shall fully/partially issue
a mix of grant, loan or State Government guaranteed bonds or get them
equity…” converted by Banks/FIs into loans or bonds with interest
not more than Banks base rate plus 0.1%.
b. The Borrowings made by the state to takeover PSPCL
debt during 2015-16 and 2016-17 shall be utilized by
Government of Punjab solely for the purpose of
discharging the PSPCL debt and transfer to PSPCL as
a mix of grant, loan or equity as described in the
following table.

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“…the rate of interest Table 19: PSPCL debt and transfer to PSPCL (` Crore)
at which state shall
Year Total Debt Transfer Transfer Transfer Outstand
be issuing Bonds for Taken to Punjab to Punjab to ing State
discharge of PSPCL's Over PSPCL in PSPCL in Punjab Loan of
the form the form PSPCL Punjab
debt shall be less by of Grant of Loan in the PSPCL
form of
about 3 – 3.5% from Equity
the rate of interest of
1 50% of the 10418.84 10418.84
PSPCL's existing total debt
debt...”
2 25% of the 5209.42 15628.26
total debt
3 15628.26
4 15628.26
5 11728.26 3900.00
Source: (PSPCL)
c. PSPCL shall be saving only on account of reduced

interest rate up to 2019-20 as the rate of interest at
which state shall be issuing Bonds for discharge of
PSPCL's debt shall be less by about 3 – 3.5% from the
rate of interest of PSPCL's existing debt. The expected
savings on account of interest till 2019-20 is expected
to be around `600 crore per annum. However, from the
year 2020-21, the saving on account of interest to
PSPCL shall be more as the entire loan of `15628.26
crore will be converted into grant and equity.
d. PSPCL is required to undertake certain measures to
reduce its AT&C losses to 14%

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State Finances
“…It is mentioned that

e. All outstanding dues from the State Government
interest payment will
departments to PSPCL for supply of electricity shall be
be paid by the state
paid by 30.03.2016.
government even for
the first four years...”
4.1 Accordingly, Government of Punjab has issued Punjab
Special Bonds amounting to `15628.26 crore during
2015-16 & 2016-17.
4.2 PSPCL shall pay interest to the Government of Punjab
on the outstanding loan in a financial year at the rate at
which the Government issued non–SLR bonds up to
2019-20. However, Government of Punjab will make
the payment of interest and principal after 2019-20.
4.3 Further, a back to back agreement has been signed by
Government of Punjab with PSPCL under which
PSPCL will pay the interest and principal to
Government of Punjab after the financial year 2019-20.
4.4 As regards the balance `5209.42 crore (25% of
outstanding debt of `20837.68 crore of PSPCL as on
30.09.2015), PSPCL was to issue Government
Guaranteed DISCOM Bonds. Government of Punjab
approved providing for State Government guarantee for
issue of Bonds amounting to `5209.42 crore including
interest thereon subject to a cap of 10% on rate of
interest and on the terms specified by Finance
Department of Government of Punjab. PSPCL has
invited bids for issue of DISCOM Bonds, but no
response has been received in this regard.
4.5 It is mentioned that interest payment will be paid by the
State Government even for the first four years but the
same would be adjusted out of subsidy payable to
PSPCL. Annual liability on an average is `1300 crore
in initial 5 years and `2800 crore during next 5 years

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State Finances
“…The interest
or so and about `1200 crore in next 5 years.
burden on account of
4.6 Punjab Government has floated UDAY bonds of the
the floating of these
order of `15628.26 crore in March/April 2016 on the
bonds has already
been added to the directions of Government of India. The interest burden
burden of State on account of the floating of these bonds has already
Government...” been added to the burden of State Government. This,
along with the financial burden of servicing of interest
on the bonds to be raised for settlement of outstanding
CCL accounts, is likely to be huge. In addition, there will
also be liability towards repayment of principal amount
of both UDAY bonds as well as CCL bonds.
4.7 It must be mentioned that PSPCL has been running into
losses from its very inception. It made nominal profits
only for 3 years, from the year 2012-13 to 2014-15 and
again slipped into losses during the year 2015-16. It
suffered losses of `1695 crore during the year 2015-16
and has accumulated losses of `3196 crore as on
31.03.2016. The debt profile and statement of interest
payments is mentioned in Annexure IV.
CONCLUSION
4.8 Accumulation of interest burden on account UDAY

Bonds along with servicing of interest on the bonds
raised for the settlement of CCL account, together has
led to further increase the burden of State’s committed
liabilities. This huge debt liability, pre-empt significant
resources of the State.

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PUBLIC SECTOR UNDERTAKINGS
Chapter 5
Page | 81 Chapter 5: Public Sector Undertakings

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PUBLIC SECTOR UNDERTAKINGS

Chapter 5
5.0 There are 55 (29 Boards + 26 Corporations) Public Sector

Undertakings (PSUs) of Punjab Government. In addition,
there are some Co-Operative Apex Institutions and
Authorities such as MARKFED, SUGARFED, MILKFED,
HOUSEFED, Punjab State Co-operative Bank, Punjab
State Co-operative Agriculture Development Bank, in which
“…The total amount Punjab Government has stake in form of equity or debt. The
of equity in these total amount of equity in these PSUs and Cooperative Apex
PSUs and Institutions is `8234.30 crore. The total amount of
Cooperative Apex
outstanding Government loans of these entities is
Institutions is
`17030.92 crore. The outstanding loans of other
`8234.30 crore…”
Institutions were `22593.95 crore, and loans of `20608.17
crore was outstanding against Government guarantee. In
“…loans of case of default, it is the bounden duty of the State
`20608.17 crore was Government to repay these loans to the lenders (Annexure
outstanding against V, VI & VII).
Government 5.1 The State Government had decided that the PSUs and
guarantee…” Apex Co-operative Institutions should give at least a
modest return of 5% on the equity invested by the State
Government. However, none of the PSUs except Punjab
Small Industries and Export Corporation, CONWARE,
Punjab State Forest Development Corporation Ltd. and
Punjab State Co-operative Agricultural Development Bank
have paid any return up to 31.03.2016.

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“…The cumulative
The Government received only a small amount of `4.01
losses of the
crore during the year 2015-16 as dividend on a huge
Corporation are
investment of `8234.30 crore in these PSUs and Co-
`386.94 crore
(provisional) up to operative Institutions.
2015-16. The 5.2 The finances of some of the major Public Sector
financial position of Undertakings of the Government, namely PRTC, PSIDC,
PRTC is so weak that
MARKFED, PUNSUP, PAIC, PUNGRAIN, PSWC, PFC,
it is not even able to
SUGARFED and PUDA are analyzed below.
fully pay the taxes...”
PEPSU ROAD TRANSPORT CORPORATION (PRTC)
5.3 PEPSU Road Transport Corporation (PRTC) is a Public

Sector Undertaking which was set up in 1956 and at
present has a fleet of 1056 buses. Government of Punjab
has invested `307.08 crore as Equity Share Capital and
has also given loan to PRTC, out of which `23.75 crore is
outstanding as on 28.02.2017. PRTC is suffering from
chronic losses. The average losses of PRTC ranged
between `7 crore to `15 crore from the year 2005-06 to
2015-16. The cumulative losses of the Corporation are
`386.94 crore (provisional) up to 2015-16. The financial
position of PRTC is so weak that it is not even able to fully
pay the taxes that it collects and is liable to transfer to the
State Government. As on 31.3.2017, it has pending arrears
of `197.62 crore to be paid to the State on this account
only.

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“…PSIDC was unable

PUNJAB STATE INDUSTRIAL DEVELOPMENT
to service the debt it
CORPORATION LTD. (PSIDC)
had incurred as part
of its operations the
5.3 Punjab State Industrial Development Corporation Limited Government had
(PSIDC) was incorporated in 1966 to act as a catalyst for given guarantee(s) to
the development of large and medium scale industries in the Corporation for
Punjab. In 1976, PSIDC was also declared as a second raising funds through
state level financial institution under the Refinance Scheme private placement of
of IDBI/SIDBI. The Corporation thus combined in itself the bonds and interest
payments thereof...”
role of Institutional promoter & investor, term lender and
Facilitator for Mega Project. Since PSIDC was unable to
service the debt it had incurred as part of its operations, the
Government had given guarantee(s) to the Corporation for
raising funds through private placement of bonds and
interest payments thereof. The total bonds of `1717.38
crore were raised out of which `606.46 crore are
outstanding on account of principal and `125.10 crore is
outstanding on account of interest on these bonds as on
31.03.2017. Out of the outstanding principal of `606.46
crore, `324.20 crore is due for the payment as on
31.03.2017 and PSIDC is not able to pay the due principal
amount of bonds.
5.4 The Corporation had been making profits till the year 1994-
95. Thereafter, the Corporation slipped into losses. It
suffered loss of `14.07 crore during the year 2015-16. The
accumulated losses of the Corporation as on 31st March,
2016 are `707.83 crore, thereby wiping off its entire net
worth. The reasons for the losses are mainly lower
recovery of interest dues, scheduled disinvestments not
taking place and high financial charges on account of
interest on bonds.

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“…If PSIDC fails to

5.6 As on 31.03.2017, PSIDC is a defaulter in the repayment
come out of the
of bonds aggregating `324.20 crore and interest of
present situation, the
`125.10 crore on these Bonds. Apart from this, PSIDC has
due/outstanding
principal and interest also not paid guarantee fee of `26.63 crore as well as
amount of Bonds stamp duty of `8.62 crore. The Corporation has received
secured by legal notices from about 42 companies, out of which 6
Government companies have already filed suit before Hon’ble Punjab &
guarantee of about Haryana High Court for recovery of their dues and winding
`731 crore shall
up of the Corporation. The above mentioned liabilities of
devolve on the State
PSIDC are in dangerous zone. The bonds and the interest
Government further
thereon are guaranteed by the State Government. If PSIDC
straining its
fails to come out of the present situation, the
precarious
due/outstanding principal and interest amount of Bonds
finances...”
secured by Government guarantee of about `731 crore
shall devolve on the State Government further straining its
precarious finances.
PUNGRAIN
5.7 PUNGRAIN was established in March, 2003 for

procurement of Food Grains (Wheat & Paddy) for
Central/State Pool. State government has invested `1.05
crore in PUNGRAIN in the form of equity. PUNGRAIN has
raised `164.65 crore as loans from banks. Loans to the
tune of `6813.05 crore raised against Government
Guarantee are outstanding as on 28.02.17. Due to partial
reimbursement of incidental Charges by FCI, PUNGRAIN
is suffering heavy losses. The losses for the year 2014-15
amounted to `370.76 crore and the accumulated losses of
PUNGRAIN as on 31.03.15 are `2312.19 crore.

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“…The accumulated
PUNJAB FINANCIAL CORPORATION (PFC)
losses of PFC as on
31.03.2016 are
5.8 Punjab Financial Corporation was incorporated on
`268.35 crore. PFC is
01.02.1953 under the State Financial Corporations Act
a defaulter in the
1951, with the main objective to grant loans for the
repayment of `123.15
establishment of new micro, small & medium scale crore on account of
industrial units, modernization, expansion/ diversification of Bonds and interest
existing units in the State of Punjab. Punjab Government thereon. The bonds
holds `29.31 crore Equity Share Capital of PFC, out of total and the interest
equity of `40.39 crore. Loan given by Punjab Government thereon are

guaranteed by the
to PFC amounting to `16.53 crore is outstanding as on
State Government. If
31.03.2016. State Government stands as a guarantor to
PFC fails to come out
the Bonds of `250 crore issued by PFC. The outstanding
of the present
amount of Bonds on account of principal is `172.26 crore
situation, the
and `23.66 crore is outstanding as interest on these due/outstanding
Bonds. Due to decline in the growth of industries in Punjab, principal and interest
high cost of borrowings, loss of interest due to sacrifice of amount of Bonds
interest on various OTS policies of State Government, the secured by
Corporation is running into losses, resulting into weak Government

guarantee shall
financial health of PFC. The accumulated losses of PFC as
devolve on the State
on 31.03.2016 are `268.35 crore. PFC is a defaulter in the
Government further
repayment of `123.15 crore on account of Bonds and
burdening its stressed
interest thereon. The bonds and the interest thereon are
finances…”
guaranteed by the State Government. If PFC fails to come
out of the present situation, the due/outstanding principal
and interest amount of Bonds secured by Government
guarantee shall devolve on the State Government further
burdening its stressed finances.

WHITE PAPER
State Finances
“…During the year

SUGARFED
2015-16, SUGARFED
suffered the losses to
5.9 The Punjab State Federation of Cooperative Sugar Mills
the tune of `259.62
Limited (SUGARFED) was established in 1966 under the
crore and the
Punjab State Cooperative Societies Act 1961. Its objective
accumulated losses
were: to assist in the promotion & organization of Sugar
as on 31.03.2016
Mills, facilitate and coordinate the working of Cooperative
amounted to
`1214.50 crore...” Sugar Mills in the State of Punjab; provide technical
knowhow and other aspects in the selection of man power,
purchase, installation and maintenance of plant &
machinery and other equipment including expansion
proposal, cogeneration and downstream Industrialization;
assist sugar mills in securing the financial assistance from
the State Government or Central Government or from other
‘Financial Institutions’; and purchase or assist in purchase
of bulk gunny bags, Sulphur, limestone, lubricants,
chemicals, spares and stores required by the sugar mills
for their use and for the use of their ancillary units and allied
industries.
5.10 Punjab Government holds equity share capital of `138.48
crore in the SUGARFED, and has also given loan of
`1139.29 crore to SUGARFED. During the year 2016-17,
a loan of `51.31 crore (`45.99 crore principal + `5.32
crore interest) of Bhogpur CSM was also converted into
share capital. SUGARFED has also raised `157.46 crore
as loan from Rural Development Fund, MARKFED, and
PUDA. Due to overstaffing in sugar mills, under
procurement of sugarcane, sale of sugar at lower prices
and low revenue for high priced inputs, SUGARFED is
running into losses.

WHITE PAPER
State Finances
“…The amount of
During the year 2015-16, SUGARFED suffered the losses
loans raised by PUDA
to the tune of `259.62 crore and the accumulated losses
from banks other than
as on 31.03.2016 amounted to `1214.50 crore. Due to
Government
poor financial health of the Cooperative Sugar Mills, mills
Guarantee is `545.00
are not in a position to the pay loans taken and hence crore out of which
default has been made in repayment of `710.97 crore on `486.66 crore is
account of principal and interest. outstanding as on
28.02.2017...”
PUDA
5.11 Punjab Urban Development Planning & Development

Authority was constituted w.e.f 01.07.1995 under the
Punjab Regional and Town Planning and Development Act
1995 with the objective to promote and secure better
planning and development of any area of the State.
Government has given guarantee amounting to `2124.93
crore, out of which outstanding guarantee as on
31.03.2017 is `1413.49 crore.This includes loan of `2000
crore raised by PUDA on behalf of the State Government,
monthly installments of which are being funded by State
Government out of the budget. The amount of loans raised
from banks other than Government Guarantee is `545
crore, out of which `486.66 crore is outstanding as on
28.02.2017.
5.12 The regularization charges to the tune of approximately
`400 crore were not used for long and then subsequently
out of these, funds to the tune of `250 crore to be spent on
the up gradation of these colonies were also got deposited
into the State treasury as a short term loan thus leaving
hardly any margin for the authorities to undertake
development functions. The details of major PSUs is given
at Annexures VIII – XVIII.

WHITE PAPER
State Finances
“…MARKFED
MARKFED
suffered a loss
amounting to
5.13 The Punjab State Co-op Supply & Marketing Federation
`394.87 crore during
Ltd. known as “MARKFED” was registered in 1954. Punjab
the year 2015-16 and
Government has an investment of `21.06 crore in the
have accumulated
Share capital of MARKFED, and has given guarantee
losses amounting to
`1654.25 crore as on amounting to `27782.77 crore out of which `7219.81 crore
31.03.2016. Clearly, is outstanding as on 28.02.2017, for its operations. Apart

this apex cooperative from this, MARKFED also owes `1139.99 crore to financial
institution is suffering institutions on account of loans (not secured by
from financial ills...” Government Guarantee). MARKFED was making profits till
2010-11 but slipped into losses from 2011-12 onwards.
MARKFED suffered a loss amounting to `394.87 crore
during the year 2015-16 and have accumulated losses
amounting to `1654.25 crore as on 31.03.2016. Clearly,
this apex cooperative institution is suffering from financial
ills.
PUNJAB STATE CIVIL SUPPLIES CORPORATION

LIMITEDNSUP)
5.14 The Punjab State Civil Supplies Corporation Limited,
popularly known as PUNSUP, incorporated on February
14, 1974, as a wholly owned Government Company with
`3.73 crore Equity Share Capital of Punjab Government.
The Government has given a Guarantee of `30185.70
crore to PUNSUP out of which `8685.83 crore are
outstanding as on 28.02.2017. PUNSUP was making
negligible profits till 2013-14 and slipped into Losses in the
year 2014-15 adding to its accumulated losses which
amounts to `1532.79 crore as on 31.03.2016. Apart from
the loans raised against Government Guarantee, PUNSUP

WHITE PAPER
State Finances
“…the corporation
has also taken several loans from the Banks, out of which
was forced to divert
`1493.25 crore are outstanding as on 28.02.2017.
funds of `52.34 crore
to Atta Dal Scheme,
PUNJAB AGRO FOOD GRAINS CORPORATION LIMITED
whereas the same
were to be spent by
5.15 Punjab Agro Food Grains Corporation Limited was
the State
incorporated on 8th of July, 2002 to take up the activities
Government...”
relating to food grain, minerals, metals, fertilizers, chemical
pesticides etc.. Guarantee amounting to `12316.94 crore
has been issued to the corporation out of which `5292.71
crore are outstanding as on 28.02.2017. The accumulated
losses of the corporation, as on 31.03.2016 are `152.26
crore (approximately). Outstanding loans from the financial
institutions (not covered by the Government Guarantee)
amount to `418.74 crore as on 28.02.2017.
PUNJAB STATE WAREHOUSING CORPORATION
5.16 The Warehousing Corporations Act, 1952, a Government

of India Act provides for the incorporation and regulation of
State Warehousing Corporations with an objective of
warehousing of agricultural produce and other notified
commodities. The Government of Punjab, Department of
Agriculture notified the establishment of the Punjab State
Warehousing Corporation (PSWC) w.e.f. 01.11.1967 for
the above said purposes.
5.17 The corporation has been undertaking its core activity of
warehousing and in addition procurement of food grains
and implementation of the Atta Dal Scheme. It was forced
to divert funds of `52.34 crore to Atta Dal Scheme,
whereas the same were to be spent by the State
Government.

WHITE PAPER
State Finances
“…The State
5.18 The Government of India, Ministry of Food circulated PEG
Government belatedly
(Private Entrepreneurs Guarantee) Scheme’ 2008
nominated
earmarking creation of 71.25 LMT covered capacity in the
PUNGRAIN
State of Punjab through the private entrepreneurs. The
(incorporated by the
Department of Food policy prescribed the State Warehousing Corporations as
& Supplies) as the the Nodal Agency of the respective States for the said
Nodal Agency in 2011 purpose of developing the covered capacities. But the
in contravention of State of Punjab, against the said policy, delayed the
the Allocation of finalization of the Nodal agency till up to 2011 thereby
Business Rules, seriously impeding the implementation of the scheme.
2007...”
5.19 The Government of India, due to the lackadaisical attitude
of the State Govt, withdrew 20 LMT allotted capacity of the
State of Punjab and transferred the same to other States,
thus reducing the share of Punjab to 51.25 LMTs which
adversely affected the covered storage capacity on one
hand and resulted in Open Storage of food grains on the
other hand. The State Government belatedly nominated
PUNGRAIN (incorporated by the Department of Food &
Supplies) as the Nodal Agency in 2011 in contravention of
the Allocation of Business Rules, 2007 i.e. Item No.13
under Rule-2
“Storage and Warehousing of Food grains including small
size facility of storage and warehousing at farm level and
assessment of storage capacity for storage of food grains
to be procured by the Department of Food and Supplies
and other Agencies”
which is in the purview of Department of Agriculture
through PSWC.

WHITE PAPER
State Finances
“…Surprisingly,
5.20 The Government of India allocated silos creation @20
PUNGRAIN without
LMTs throughout the country in 2012 with a 30 year
awaiting the report of
guarantee and 20% VGF. The State of Punjab was
the subcommittee of
allocated 4 LMT out of this. In addition, the Government of
the Ministers and
Punjab on 20.05.2015, declared PSWC as the Nodal
without any approval
Agency for the creation of 15 LMT silos in the State. The and guarantee for silo
tenders for 8 sites were finalized by PSWC and it was in capacity utilization
the advanced stages of grant of Letter of Intent when the from FCI, proceeded
Department of Food and Supplies vide its letter dated ahead with the
16.09.2015 restrained PSWC to proceed further in the creation of silo
matter and the Government constituted a sub-Committee capacity against the

Allocation of Business
of Ministers comprising Hon’ble Ministers of Food and Civil
rules. The haphazard
Supplies, Finance and Agriculture for finalizing a uniform
creation of silo
policy for Silo creation in the State. Subsequently, another
capacity by
committee was constituted on 25.02.2016 under the
PUNGRAIN without
chairmanship of Hon’ble Deputy CM but the committee
any uniform policy
failed to submit any report. and study of existing
5.21 Resultantly, PSWC was constrained to annul the tendering storage capacities of
process. Surprisingly, PUNGRAIN without awaiting the all agencies may
report of the subcommittee of the Ministers and without any affect present
approval and guarantee for silo capacity utilization from utilization of storage
FCI, proceeded ahead with the creation of silo capacity capacities of State
Procuring agencies
against the Allocation of Business rules. The haphazard
(SPAs) resulting in
creation of silo capacity by PUNGRAIN without any uniform
financial loss to
policy and study of existing storage capacities of all
SPAs...”
agencies may affect present utilization of storage
capacities of State Procuring agencies (SPAs) resulting in
financial loss to SPAs.

WHITE PAPER
State Finances
“..The funds of the

CONCLUSION
SPSEs have thus
either not been used
5.22 Thus, the key objective of establishing PSUs is being
for the mandated
breached with the fact that on one hand the State is losing
purpose or diverted
on the return on investment with the meagre earning of
for works beyond
R4.01 crore dividend and at the same time unnecessarily
their jurisdiction...”
increasing the burden on the citizens of the State in the
shape of Guarantees being given to these inefficient and
loss making entities.
5.23 The funds of the State Public Sector Enterprises (SPSEs)
have thus either not been used for the mandated purpose
or diverted for works beyond their jurisdiction.

WHITE PAPER
State Finances
OFF BUDGET FUNDS
Chapter 6
Page | 95 Chapter 6: Off Budget Funds

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State Finances

WHITE PAPER
State Finances
OFF BUDGET FUNDS

Chapter 6
6.0 As per Article 266 of the Constitution of India, all loans

raised by State Government by issuing of Treasury bill,
loans or ways & means advances and all moneys received
by the State Government for repayment of loans, shall form
the Consolidated Fund of the State.
6.1 There are a number of State Agencies including many
“…The total receipt of boards and societies, which have been authorized from
these Organizations time to time to collect funds in the form of fees and cess
for the last 3 years directly and retain the collections in the bank accounts
has been in the range bypassing the Consolidated Fund of the state. These
of `4234 crore to
Organizations include Punjab Rural Development Board,
`6782 crore whereas
Punjab Municipal Infrastructure Development Company,
the expenditure has
Punjab Infrastructure Development Board, PLRS, ETTSA
been in the range of
etc. The total receipt of these Organizations for the last 3
`5026 crore to
years has been in the range of `4234 crore to `6782 crore
`8625 crore …”
whereas the expenditure has been in the range of `5026
crore to `8625 crore (Table 20 & 21). These off Budget
funds have had a tremendous impact on the liquidity
position of the state treasury thereby jeopardizing its efforts
to mobilize funds under various schemes from the
Government of India.
6.2 The Receipts and Expenditure of these
Boards/Funds/Societies for the year 2014-15 to 2016-17
are given at Table 20.

WHITE PAPER
State Finances
Table 20: Receipts and Expenditure of Boards/Funds/Societies - 2014-15 to 2016-17 (` crore)
SN Name 2014-15 2015-16 2016-17

of Recei Expen Surplu Recei Expendi Surplu Receipt Expen Surplus
Fund pt diture s/(Sho pt ture s/(Sho diture /(Shortf
rtfall) rtfall) all)
1 PIDB 1177 2131 -954 2636 2165 471 2193 4167 -1974
2 PMF 1490 1476 14 1440 1450 -10 1569 1565 4
3 PEDB 219 173 46 150 118 32 79 79 0
4 PMIDC 159 165 -6 143 141 2 165 131 34
5 PLDB 16 8 8 17 44 -27 17 34 -17
6 PRDB 1173 1073 100 1217 1104 113 2759 2649 110
TOTAL 4234 5026 -792 5603 5022 581 6782 8625 -1843
Source: (Concerned Boards/Funds/Societies)
Table 21: Receipts and Expenditures of some of the Societies - 2016-17 (` crore)
SN. Name of the Society Revenue Expenditure
1 Punjab State Transport Society 55.00 36.23

2 Punjab State Media Society (Punmedia) 10.06 8.15
3 Punjab Land Records Society 88.24 111.00
4 Punjab State Fisheries Development 3.28 0.82
Board
5 Society for Promotion of Shrimp Farming 0.00 2.93
in Punjab
6 Punjab Live Stock Development Board 17.28 34.23
7 Excise and Taxation Technical Services 21.27 86.88
Agency (ETTSA)
8 Punjab Information and Communication 0.14 0.10
Technology
9 Punjab Zoos Development Society 3.12 2.13
10 Punjab State Child Protection Society 0.53 ---
11 Punjab State E-Governance Society 1.03 1.60
Total 199.95 284.07
Source: (Concerned Societies)

WHITE PAPER
State Finances
“…It is observed that

SOCIETIES
yearly receipts and
expenditure do not
6.3 There are three big spending societies floated by the
match, they may be
Department of Transport (Punjab State Transport Society),
either accumulating
the Department of Revenue (Punjab Land Records Society)
funds in their corpus
and the Department of Excise and Taxation (Excise and
fund or spending out
Taxation Technical Services Agency). Ostensibly, these are
of it…”
Societies registered under the Registration of Societies Act,
1908, with the stated objective of implementing e-
governance in the Transport Department, Computerization
of Land Records and Registration Documents and
Computerization of the Excise and Taxation department.
Their sources of revenue are fees and user charges, which
are retained by the societies and deposited in their
respective bank accounts.
6.4 It is observed that yearly receipts and expenditure of these
Societies do not match (Table 22). They may be either
accumulating funds in their corpus fund or spending out of
it (Table 22). Their functions are no different from the
functions of the concerned departments and should be
legitimately performed by them and the funds provided for
the same in the State Budget.
Table 22: Receipts and Expenditure of Societies for 2014-15 to 2016-17

(` crore)
Sr. Name of Society Receipts Expenditure

No.
1 Punjab State Transport Society 206.20 144.11
2 Punjab Land records Society 277.68 345.13
3 Excise and Taxation Technical 161.87 130.58

Services Agency (ETTSA)
Source: (Concerned Societies)

WHITE PAPER
State Finances
“…The previous
PUNJAB INFRASTRUCTURE DEVELOPMENT BOARD (PIDB)
Government
amended the PIDB
6.5 The State Government in the Department of Finance
Act from time to time
notified creation of Punjab Infrastructure Development
and diluted the role of
Board in 1998 for overall planning and infrastructure
the Board from taking
development across various infrastructure sector. to major projects to
6.6 The 1998 Act was repealed with more comprehensive the smallest of the
Punjab Infrastructure (Development & Regulation) Act projects…”
2002 to provide for the partnership of private and public
sectors, participation of private sector in the development,
operation and maintenance of infrastructure facilities and
development and maintenance of infrastructure facilities
through financial sources other than those provided by the
State budget by following modern project management
systems and for matter connected therewith or incidental
thereto. The Board was mandated to take up flagship
projects in the State and attract Private sector participation
across various Infrastructure sectors.
6.7 The previous Government amended the PIDB Act from
time to time and diluted the role of the Board from
undertaking major projects to the smallest of the projects,
which were inconsequential for the infrastructure
development of the State, and didn’t create resource
generating assets.
6.8 A major amendment in the Act which led to the dilution of
the role of the Board in the year 2015-16 was that the role
of conceptualization, identification, execution & monitoring
of the projects was given to District Infrastructure
Committees whereas such decisions were earlier taken at
the level of the State's Administrative Departments and the
Executive Committee of PIDB.
Page | 100 Chapter 6: Off Budget

Funds
WHITE PAPER
State Finances
“…the expenditure
6.9 On perusal of income and expenditure statement of last 10
exceeds the income
years as given in Table 23, it can be seen that the
in six out of ten years
expenditure exceeds the income, in 6 out of 10 years
during the previous
Government
during the previous Government regime.
regime…”
Table 23: Income & Expenditure of PIDB (` crore)
Financial Income Expenditure Excess of

Year Expenditure over
income
2007-08 219.76 319.76 (-) 100.00
2008-09 620.70 552.80
2009-10 741.95 777.16 (-) 35.21
2010-11 694.94 1066.69 (-) 371.75
2011-12 687.38 1452.08 (-) 764.70
2012-13 1304.37 647.25
2013-14 1191.36 692.59
2014-15 1177.38 2130.96 (-) 953.58
2015-16 2635.96 2164.64
2016-17 2203.30 4194.26 (-) 1990.96
Grand Total 11477.10 13998.19
Source: (PIDB)
6.10 To meet with this shortfall, debt was raised by the Board,
from time to time as detailed below by escrowing the future
receipts of the Board.
Table 24: Detail of debt raised by PIDB (` crore)
Particulars Financial year Amount of debt
Bonds 2007-08 649.93
Bonds 2008-09 900.03
Term Loans from Banks 2015-16 250.49
Term Loans from Banks 2016-17 2922.44
Grand Total 4722.89
Source: (PIDB)

Funds
WHITE PAPER
State Finances
“…The projects which

6.11 Even as on date, the outstanding debt of Bonds is `985.89
were funded out of
crore excluding interest which will be re-paid in installments
Funds of the Board
upto to the year 2033-34 (Annexure - XIX). Similarly, the
were largely politically
outstanding Bank loan is `2942.60 crore, which will be re-
motivated and of little
paid in next five years starting from 2016-17 (Annexure - consequence to the
XX). As on date, PIDB also has an estimated total development of the
outstanding project funding liability of `5200 crore State...”
(approximately). As a result of these borrowings, the Board
will not be in a position to fund any new projects during the
coming years. Thus, the then Government has usurped the
rights of the future generations of the State by escrowing
the future income of the Board.
6.12 The projects which were funded out of Funds of the Board
were largely politically motivated and of little consequence
to the development of the State. `1807.45 crore was
allocated for Rural Mission, in which the majorly done
projects were re-laying of streets and drains (Galiyan-
Naliyan) in the villages, linking of Deras with roads by
brickwork, construction and repair of dharamshalas and up
gradation of cremation grounds, etc. The Department of
Rural Development and Panchayats should have done
such projects from their budgetary allocations and not from
the loan raised by escrowing the present and future
receipts of PIDB. Similarly, `2412.29 crore was allocated
for Urban Mission in which again major amount was spent
on relaying and widening of roads. Again, such projects
should have been funded by the Department of Local
Government out of its own resources or budgetary
allocations, subjecting them to the scrutiny of the State
legislature.

Funds
WHITE PAPER
State Finances
“…the role of PIDB 6.13 Similarly, funds were allocated for construction of
was reduced to Memorials amounting to `269 crore & Hop-on-Hop-off
merely being a
Buses and Amphibious Bus of `10.91 crore.
funding agency and
6.14 The Board was also made to advance short-term
the various
temporary loan to Finance Department amounting to
Departments of the
`1125 crore which was not repaid.
State started meeting
their financial 6.15 The role of PIDB was reduced to merely being a funding
requirements from the agency and the various Departments of the State started
Board, without meeting their financial requirements from the Board,
making the projects without making the projects self-sustainable and financially
self-sustainable and viable at their own level. These expenditure were neither
financially viable at presented for the sanction of the Punjab Vidhan Sabha nor
their own level. These
were these subject to the audit of CAG.
expenditure were
neither presented for
the sanction of the
Punjab Vidhan Sabha PUNJAB RURAL DEVELOPMENT BOARD (PRDB)
nor were these
6.16 Punjab Rural Development Board came into existence on
subject to the audit of
CAG…” 9th April, 1987 under Punjab Rural Development Act, 1987
with an objective to provide health, educational,
infrastructural, facilities in rural areas and to develop better
agriculture in rural areas. Punjab Government has issued
guarantee of ` 5795.94 crore, out of which `2090.40 crore
are outstanding as on 28.02.17. The income of the Board
is from Rural Development Fee (RDF) which is levied on
ad- valorem basis at the rate of `2/- for every one hundred
Rupees in respect of Agricultural Produce, bought or sold
in the notified market area. The Board has raised loans for
meeting its expenditure by securitizing its future revenues
and by agreeing to remit the same to an Escrow Account
till the repayment of such loans. Loans amounting to
`2090.40 crore are still outstanding.

Funds
WHITE PAPER
State Finances
“…the decisions were

6.17 The following irregularities have been observed in the
unplanned, scattered
functioning of the board:
and against the core
a. Funds are being released on adhoc basis without any
mandate of the
plan or prioritisation of requirement of rural areas
constitution of Boards
b. Funds are being released without the works being and also need based
administratively and technically approved. assessment was
c. 100% funds are released to the Executing agencies found missing ….”
on the receipt of adhoc demand
d. The details of funds released are given in Annexure
XXI, which shows that funds were unevenly released
and major chunk of funds were released to the
Districts of Sri Muktsar Sahib, Fazilka and Bathinda,
which clearly depicts lopsided allocation of resources.
6.18 The receipt and payment of RDF for the last five years i.e.
from 2012-13 to 2016-17 are given in Annexure XXII.
PUNJAB MANDI BOARD
6.19 The income of the Board is from Marketing Development

Fee (Mandi Fee) which is levied on ad- valorem basis at
the rate of `2 for every one hundred Rupees in respect of
Agricultural Produce, bought or sold in the notified market
area. The fee so levied is collected by the Market
Committees of Punjab Mandi Board. Approximately 47 %
of the Mandi Development Fee is received by the Punjab
Mandi Board after the retention of approximately 53% at
Market Committees.
6.20 The Market Fee is being spent for the purposes mentioned
under Section 26 and Section 28 of The Punjab Agricultural
produce Markets Act, 1961.

Funds
WHITE PAPER
State Finances
“…the Board has

6.21 Punjab Mandi Board has spent 45% of the fee collected on
incurred
construction/repair of roads, another 24% to meet
disproportionately in
establishment expenditure and only 7% has been spent on
undertaking activities
the development of Mandis which is the main objective of
which should not
have been that constitution of the Board. The core areas on which the
important. Apart from market development fund should have been utilized are the
this, the Board has better marketing of agricultural products, grading and
pledged the future standardising of agricultural products, to carry out
receipts by raising extension activities and educating the farmers in marketing
loans and spending activities. As against this the Board has incurred
them on unwarranted disproportionately in undertaking activities which should
items...”
not have been that important. Apart from this, the Board
has pledged the future receipts by raising loans and
spending them on unwarranted items.
6.22 As per the orders of the previous Government, PMB has
paid `15 crore, i.e. `5 crore per year towards cultural cess,
which is not covered under section 26. Similarly
maintenance of sports stadium had been assigned to PMB
in contravention of the provisions of Section 26 and Section
28 of The Punjab Agricultural produce Markets Act, 1961.
Table 25: Expenditure detail of PMB (` crore)
Sr. Expenditure 2012-3 2013-14 2014-15 2015-16 2016-17

No. (BE)
1 Development Of 92.45 36.77 42.69 86.26 60.00

Mandis
2 Board Work 20.02 25.21 1.73 7.08 8.00
3 Repair of Rural 134.02 196.09 458.71 160.59 375.00

Link Roads
4 Marketing 9.68 17.96 38.85 18.92 10.95
Development
Schemes
Total 256.17 276.03 541.98 272.85 453.95
Source: PMB
Note: Cost of Office Building at Mohali for the years 2012-13 to 2014-15 Approx. `65 crore

Funds
WHITE PAPER
State Finances
“…the decisions were

CONCLUSION
unplanned, scattered
6.23 In view of the above it has been observed that amongst the and against the core
mandate of the
administrative departments the issue of increasing
constitution of Boards
tendency to float statutory entities and to retain the
and also need based
revenues generated by various levies, in a separate corpus
assessment was
fund, instead of depositing the same in the Consolidated
found missing ….”
Fund of the State. These expenditure were neither
presented for the sanction of the Punjab Vidhan Sabha and
nor were these subject to the audit of CAG. It is observed
that the decisions were unplanned, scattered and against
the core mandate of the constitution of these entities and
also need based assessment was found missing, and
certainly circumventing of Article 266 (1) of the Constitution
of India.

Funds
ABBREVIATIONS
1 BE Budget Estimates
2 AG Accountant General
3 AMRUT Atal Mission for Rejuvenation and Urban Transformation
4 ARM Additional Resource Mobilisation
5 BCR Balance in Current Revenues
6 BPL Below Poverty Line
7 C&AG Comptroller and Auditor General
8 CAGR Compound Annual Growth Rate
9 CAPEX Capital Expenditure
10 CCL Cash Credit Limit
11 DA Dearness Allowance
12 DFPD Department of Food and Public Distribution
13 EAP External Aided Projects
14 EMI Equated Monthly Instalment
15 ESO Economic Statistical Organization
16 ETTSA Excise and Taxation Technical Services Agency
17 FCI Food Corporation of India
18 FD Finance Department
19 FFC Fourteenth Finance Commission
20 FI Financial Institutions
21 FRBM Fiscal Responsibility and Budget Management
22 GDP Gross Domestic Product
23 GMADA Greater Mohali Development Authority
Page | 107
24 GoI Government of India
25 GoP Government of Punjab
26 GSDP Gross State Domestic Product
27 GST Goods & Services Tax
28 HOUSEFED Punjab State Federation of Cooperative House Building societies Limited
29 MARKFED Marketing Federation Limited
30 MDF Marketing Development Fee
31 MILKFED Punjab State Cooperative Milk Producers' Federation Limited
32 MoU Memorandum of Understanding
33 MSP Minimum Support Price
34 NABARD National Bank for Agriculture and Rural Development
35 NIPFP National Institute of Public Finance and Policy
36 NPA Non-Performing Assets
37 NSSF National Small Saving Funds
38 OMB Open Market Borrowings
39 OTS One Time Settlement
40 PFC Punjab Financial Corporation
41 PIDB Punjab Infrastructure Development Board
42 PIDF Punjab Infrastructure Development Fund
43 PMB Punjab Mandi Board
44 PMIDC Punjab Municipal Infrastructure Development Company
45 PMIDF Punjab Municipal Infrastructure Development Fund
46 PMO Prime Minister Office
47 PRDB Punjab Rural Development Board
Page | 108
48 PRIs Panchayati Raj Institutions
49 PRTC Punjab Road Transport Corporation
50 PSERC Punjab State Electricity Regulatory Commission.
51 PSFC Punjab State Finance Commission
52 PSIDC Punjab State Industrial Development Corporations
53 PSPCL Punjab State Power Corporation Limited
54 PSU Public Sector Undertakings
55 PSWC Punjab State Warehouse Corporation
56 PUDA Punjab Urban Development Planning and Development Authority
57 PUNGRAIN Punjab Grains Procurement Corporation Limited
58 PUNSUP Punjab State Civil Supplies Corporation
59 RBI Reserve Bank of India
60 RDB Rural Development Board
61 RDF Rural Development Fees
62 RE Revised Estimates
63 RKVY Rastriya Krishi Vikas Yojana
64 SBI State Bank of India
65 SFC State Finance Commission
66 SLR Statutory Liquidity Ratio
67 SPA State Procurement Agencies
68 SPSE State Public Sector Enterprises
69 SUGARFED Punjab State Federation of Cooperative Sugar Mills.
70 ToR Terms of Reference
71 UDAY Ujwal DISCOM Assurance Yojana
Page | 109
72 ULBs Urban Local Bodies
73 VAT Value Added Tax
74 WMA Ways and Means Advance
Page | 110
DEFINITIONS
Sr. Term Used Definition
No.
1 Budget Estimates The Budget attempts to arrive at an accurate estimate of the receipts
(BE) and expenditure under each of the heads of accounts for the
forthcoming year. The estimates are based upon the experience of the
past years and the present policies of the Government and the
anticipated events likely to occur in the future.
2 Capital Account Capital Account are the transactions of the Government outside the
Revenue Budget. Capital Account relates to the expenditure on items
which lead to direct capital formation like buildings, roads, irrigation
projects, machinery and equipment, share capital investments, etc.
Capital Account also includes loans and advances given or obtained by
the State Government. This would therefore, include the loans and
advances received from the Centre and repayment thereof and the
loans and advances made by the State Government to Boards,
Corporations and other institutions and the repayment of such
advances. The interest on these loans forms part of the revenue
account.
3 Consolidated “Consolidated Fund” is the expression, which came into use, based on
Fund Article 266(1) of the Constitution. The normal revenues of the
Government for the year, as shown in Revenue Account Receipts of
the Budget, form part of the Consolidated Fund. Loans raised by the
Government from the public, including financial institutions and form
the Government of India, enter the Consolidated Fund. Moneys
received by the government in repayments of loans are also included
in the Consolidated Fund. The disbursements made out of these
sources are consequently shown under the head of the Consolidated
Fund. All expenditure proposed to be met from the Consolidated Fund
should be placed before the Legislature and should be voted by the
Legislature, except certain items classified as “charged” expenditure.
4 Contingent The State Government provides guarantee for loans of Boards and
Liability Corporations and these guarantees form the basis for the
Government’s committed liability, in case of a default by the Board or
Corporation on its loan repayment, the guarantee would get invoked by
the lender and the State Government would be required to step in to
repay the loan on behalf of the entity.
5 Fiscal Deficit Fiscal Deficit means the excess of total disbursements from the
Consolidated Fund of the State (excluding repayment of debt) over total
receipts into the Consolidated Fund excluding the debt receipts during
a financial year.
6 Gross State It is defined as a measure in monetary terms of the volume of all goods
Domestic Product and services produced within the boundary of the State during a given
(GSDP) period of time accounted without duplication.
7 Non-Plan and a) Non Plan Expenditure: Non Plan Expenditure, inter-alia includes
Plan Expenditure committed expenditure on the establishment and other expenditure like
grant-in-aid by the State Government maintenance of capital assets,
subsidies, compensation, repayment of borrowings, interest payments
Page | 111
No.
etc. In a nutshell, all expenditure which is recurring and is needed every
year for the same purpose, is kept on the non- plan side.
b) Plan Expenditure: Expenditure incurred on new development
schemes/projects, expenditure on left over development works of
previous year which are phased into two-three years or so, grant-in-aid
given by GOI for a particular purpose like Central Finance Commission
grants, etc., is termed as plan expenditure. Mostly it involves the
expenditure on asset creation as well as on the development of
infrastructure. The Non Plan and Plan expenditure both are further
divided into revenue and capital account. The expenditure on
establishment, State Grant in Aid, subsidies, compensation interest
payments, etc. is kept under revenue account. Repayments of
borrowings including cash credit for the purchase of food grains,
provisions for creation of assets and other infrastructure, grant of loans
to State Public Sector Undertakings and State Government Employees
are kept under the Capital Account.
The plan expenditure under the schemes of development nature is
classified as under.
1. State Plan Schemes Sponsored by the State
2. Centrally Sponsored Schemes
a. Schemes shared between State and Centre Government.
b. Schemes 100% sponsored by the Centre Government in the
State.C11
8 Per Capita The fixed assets are consumed in the process of production of these
Income (PCI) goods and services in an economy during the given period of time.
These fixed assets are known as consumption of fixed capital (CFC).
When the CFC is deducted from GSDP, it gives NSDP (Net State
Domestic Product). The NSDP divided by the Per Capita Income.
9 Public Account Receipts and disbursements, such as deposits, reserve funds,

remittances, etc. which do not form part of the “Consolidated Fund”, are
included in the Public Account and are not subject to a vote by the
Legislature, as they are not moneys issued out of the Consolidated
Fund. All revenues received by the Government of a State, all loans
raised by that Government by the issue of treasury bills, loans or ways
and means advances and all money received by the Government in
repayment of loans granted by that Government are credited into the
Consolidated Fund of the State and provision is made in the
Appropriation Bill passed under Article 204 of the Constitution for the
appropriation out of the Consolidated Fund of all moneys required to
meet the grants made by the Assembly and the expenditure charged
on the above Fund. All other public moneys received by or on behalf of
the Government of a State are credited to the Public Account of the
State, and disbursements from that account, outside the Consolidated
Fund of the State, do not require any appropriation of funds by the
Legislature.
10 Revenue Revenue Account Disbursements give particulars of the estimated

Expenditure current expenditure of the different Departments of the Government. Of
salaries and allowances, contingencies, grants in-aid, maintenance,
pension, interest payments, interest charges etc. In other words it is
primarily restricted to expenditure that does not lead to capital formation
Page | 112
No.
11 Revenue Revenue Account Receipts constitute the “Revenue Budget” which

Receipts takes into account all revenue receipts. The total revenue receipts
include State’s Own Taxes and Non-Tax Revenues and Grants-in-Aid
and Share in Central Taxes from the Government of India.
12 Revenue Deficit When the expenditure as summarized in Revenue Account

Disbursements is deducted from the Revenue Account Receipts, we
get the “Revenue Surplus” which is available for financing capital
expenditure for the year. However, in recent years this has usually been
a negative (minus) figure and is called the “Revenue Deficit”. Revenue
Deficit otherwise means the excess of revenue expenditure over
revenue receipts.
13 The Punjab Fiscal The State Legislature has enacted this Act to provide for the
Responsibility and responsibility of the State Government to ensure prudence in fiscal
Budget management and fiscal stability by progressive elimination of revenue
Management Act, deficit, reduction in fiscal deficit, prudent debt management
2003 consistent with fiscal sustainability, greater transparency in fiscal
operations of the Government and conduct of fiscal policy in a medium
term framework and for matters connected therewith or incidental
thereto.
Page | 113
REFERENCES
1. Department of Economic & Statistical Analysis, Punjab
2. Department of Food & Civil Supplies, Government of Punjab
3. Data for 2016-17 are the initial figures published by the AG Punjab
4. State Budget Document and Finance Account of AG Punjab
5. Concerned Departments (PIDB, Pungrain, Housing, PUDA, Food Agencies,
6. Collected from respective PSUs
7. PSPCL
8. Concerned Boards/Funds/Societies (PIDB, PMF, PEDB, PMIDC, PLDB, PRDB)
9. Concerned Societies
10. PIDB
11. Department of Food & Civil Supplies, Government of Punjab
Page | 114
Annexure I: Comparison of Growth rate of Gross State Domestic Product with other States (at constant prices 2004-05)
Sr. No. State\UT 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Average
1 Bihar 16.18% 5.55% 14.54% 5.35% 15.04% 10.29% 10.69% 9.12% 10.85%
2 Goa 10.02% 5.54% 10.02% 10.20% 16.89% 20.20% 4.17% 7.71% 10.59%
3 Gujarat 8.39% 11.00% 6.78% 11.25% 10.01% 6.66% 6.15% 8.76% 8.63%
4 Haryana 11.22% 8.45% 8.17% 11.72% 7.41% 8.03% 5.50% 6.97% 8.43%
5 Madhya Pradesh 9.23% 4.69% 12.47% 9.56% 6.31% 8.54% 8.70% 9.48% 8.62%
6 Maharashtra 13.53% 11.26% 2.58% 9.30% 11.26% 4.52% 7.78% 7.28% 8.44%
7 Punjab** 10.18% 9.05% 5.85% 6.29% 6.52% 6.52% 4.64% 5.73% 6.85%
8 Rajasthan 11.67% 5.14% 9.09% 6.70% 14.41% 8.34% 6.41% 4.79% 8.32%
9 Tamil Nadu 6.13% 5.45% 10.83% 13.12% 7.39% 3.39% 7.29% 8.60%
15.21%
10 Uttar Pradesh 8.07% 7.32% 6.99% 6.58% 7.86% 5.58% 5.78% 4.95% 6.64%
Source: Ministry of Statistics and Programme Implementation, Government of India
Page | 115
Annexure-II: Balance in Current Revenues (BCR)
Sr. No. Year BCR
1 2006-07 2252
2 2007-08 -3656
3 2008-09 -3637
4 2009-10 -5757
5 2010-11 -4650
6 2011-12 -6373
7 2012-13 -6224
8 2013-14 -5739
9 2014-15 -6544
10 2015-16 -6138
11 2016-17 -4488
Page | 116
Annexure -III Pending Liability of Dearness Allowance
The State Government is to discharge the liability of Rs. 2773 crore for payment of Dearness Allowance and Interim Relief as follows:
Amount
Date of
Rs. in crores With respect to Arrears
Sr. No. DA Rate Arrear Period
Sanction Pending in
Pending Paid
Treasury
1 2 3 4 5 6 7
01.01.2014 to 30.09.2014
to 100% 14.10.2014
A. (9 months) 434 434 350
27.06.2016
(Total 868 crore)
to 107% 20.03.2015 01.07.2014 to 28.02.2015

B. - 540 -
27.06.2016 (9 months)
to 113% 01.01.2015 to 31.07.2015

C. 24.08.2015 - 556 -
(9 months)
to 119% 01.07.2015 to 31.12.2015

D. 25.01.2016 358 - -
(6 months)
to 125% 01.01.2016 to 31.10.2016

E. 21.10.2016 619 - -
(10 months)
to 132% 01.07.2016 to 31.12.2016

F. 21.12.2016 417 - -
(6 months)
01.01.2016 to 31.12.2016
G. IR @ 5% 16.02.2017 595 - -
(12 months)
Total Arrears (A-G) 2,423 1,530 350
Total Pending DA Liability

2,773
{Arrear Pending (Col.5) +Bills Pending in treasury (Col.7)}
Page | 117
Annexure -IV Debt Profile and Interest Payments of Punjab State Power Corporation Limited (PSPCL)
Sr. 2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-
Particulars unit
No 07 08 09 10 11 12 13 14 15 16 17
1 Total Revenue Rs crore 8760 11431 11936 12250 13668 16104 19804 21694 23729 24068 25543
2 Total Interest Paid Rs crore 1044 1073 1424 1646 1803 2199 2568 2667 2801 3263 2980
3 Long Term Loan Repayment Rs crore 670 1983 974 2319 588 1734 882 1288 1306 1472 3256
Interest $ LTL Repayment

4 Rs crore 1714 3056 2398 3965 2391 3933 3450 3955 4107 4735 6236
(2+3)
Working Capital Loans
5 Rs crore 3069 2275 4570 6064 6787 5215 8176 2101 1988 10790 4568
Repayments
Interest and total debt
6 Rs crore 4783 5331 6968 10029 9178 9148 11626 6056 6095 15525 10804
repayments
Total interest and Debt
7 repayment to total revenue % 55 47 58 82 67 57 59 28 26 65 42
(Sr 6 /Sr1*100)
repayment without working
8 % 20 27 20 32 17 24 17 18 17 20 24
capital to total revenue
(Sr 4/Sr1*100)
Total interest to total
9 % 12 9 12 13 13 14 13 12 12 14 12
revenue (Sr 2 /Sr1*100)
Page | 118
Annexure V : STATE EQUITY IN VARIOUS PSUs
(Rs in crore)
Sr. No Name of the Corporations/Boards, Co-operatives, Apex Institutions. Year of the Account Equity held by the State Government
1 2 3 4
A INDUSTRIES
1 Punjab Financial Corporation 2015-16 29.31
2 Punjab State Industrial Dev. Corp. 2015-16 78.21
3 Punjab Small Industries & Export Corp. 2015-16 49.86
4 Punjab INFOTECH 2015-16 19.23
B AGRICULTURE, ANIMAL HUSBANDRY AND FOREST
6 Punjab State Seeds Corporation 2015-16 4.51
7 Punjab Land Dev. & Reclamation Corp. 2017-18 1.45
8 Punjab Agro Industries Corporation 2015-16 45.46
9 Punjab State Warehousing Corporation 2015-16 4.00
10 Punjab State Container & Warehousing Corp. 2015-16 25.00
11 Punjab State Forest Dev. Corporation 2015-16 0.25
C POWER & IRRIGATION
16 Punjab State Power Corp. Ltd. 2016-17 6081.47
17 Punjab State Transmission Corp. Ltd. 2015-16 605.88
18 Punjab Water Res. Mgt. & Dev. Corp. 2015-16 300.00
D WELFARE
Page | 119
19 Punjab SCs Land Dev. & Finance Corp. 2015-16 5.42

20 Punjab Backward Classes Land Dev.Fin. Corp. 2014-15 20.00
E FOOD
21 Punjab State Civil Supplies Corporation 2015-16 3.73
22 PUNGRAIN 2015-16 1.05
F TRANSPORT
23 Pepsu Road Transport Corporation 2015-16 306.44
24 Punjab Bus Stand Management Company 2016-17 56.15
G LOCAL GOVERNMENT
25 Punjab Water Supply & Sewerage Board 2015-16 6.58
26 PMIDC 2016-17 0.05
H DEFENCE SERVICES WELFARE
27 Punjab Ex-servicemen Corporation 2015-16 2.05
I HOME
28 Punjab Police Housing Corporation 2016-17 0.05
J COOPERATION
29 MILKFED 2015-16 15.00
30 SUGARFED 2015-16 138.48
31 MARKFED 2015-16 21.06
32 HOUSEFED 2015-16 9.04
33 Punjab. State Co-op. Agri. Dev. Bank 2016-17 0.50
Page | 120
34 Punjab State Co-operative Bank 2015-16 0.20

K DEVELOPMENT
35 Punjab Infrastructure Dev. Board 2015-16 0.00
L HEALTH
36 Punjab Health System Corp. 2016-17 0.00
M HOUSING
37 Punjab Urban Planning & Dev. Authority 2015-16 0.00
N ALREADY CLOSED UNITS
38 Punjab State Leather Dev. Corp. 2004-05 3.42
39 PUNTEX 2014-15 0.00
40 Punjab. State Hosiery &Knitwear Dev. Corp 2005-06 390.70
41 Punjab. Poultry Development Corporation 2016-17 3.09
42 Punjab Tourism Development Corporation 2015-16 6.66
Total 8234.30
Source: Collected from respective PSUs.
Page | 121
Annexure VI: STATEMENT OF LOANS OF PSUs
(Rs in Crore)
Sr. Year of Raised from Punjab Other not Guaranteed by
Name of the Board/Corporation Total
No Account Government Punjab Government
1 2 3 4 5 6
A INDUSTRIES
1 Punjab Financial Corporation 2015-16 16.54 22.24 38.78
2 Punjab State Industrial Dev. Corp. 2015-16 - 0.00 0.00
3 Punjab Small Industries & Export Corp. 2015-16 0.00 0.00 0.00
4 Punjab INFOTECH 2015-16 0.00 0.00 0.00
5 Punjab Khadi & Village Industries Dev. Board 2014-15 0.00 27.92 27.92
B AGRICULTURE, ANIMAL HUSBANDRY AND FOREST
6 Punjab State Seeds Corporation 2015-16 0.00 5.00 5.00

7 Punjab Land Dev. & Reclamation Corp. 2017-18 0.00 3.72 3.72
8 Punjab Agro Industries Corporation 2015-16 0.00 0.00 0.00
9 Punjab State Warehousing Corporation 2015-16 0.00 1146.94 1146.94
10 Punjab State Container & Warehousing Corp. 2015-16 0.00 0.00 0.00
11 Punjab State Forest Dev. Corporation 2015-16 0.00 0.00 0.00
12 Punjab Mandi Board 0.00 0.00
13 Punjab Agro Food Grain Corporation 2014-15 0.00 0.00 0.00
14 Punjab Agri Export Corporation Ltd. 2015-16 0.00 0.00 0.00
15 Punjab Rural Development Board 2015-16 0.00 0.00 0.00
C POWER & IRRIGATION
16 Punjab State Power Corp. Ltd. 2016-17 15628.26 9602.74 23989.00
Page | 122
17 Punjab State Transmission Corp. Ltd. 2015-16 0.00 3741.17 3741.17
18 Punjab Water Res. Mgt. & Dev. Corp. 2015-16 222.25 0.00 222.25
D WELFARE
19 Punjab SCs Land Dev. & Finance Corp. 2015-16 0.00 0.00 0.00
Punjab Backward Classes Land Development Finance
20 2014-15 0.00 0.00 0.00
Corporation.
E FOOD
21 Punjab. State Civil Supplies Corporation 2015-16 0.00 1109.12 1109.12
22 PUNGRAIN 2015-16 0.00 0.00 0.00
F TRANSPORT
23 Pepsu Road Transport Corporation 2015-16 23.75 45.09 68.84
24 Punjab Bus Stand Management Company 2016-17 0.00 35.23 46.82
G LOCAL GOVERNMENT
25 Punjab Water Supply & Sewerage Board 2015-16 0.00 0.00 0.00
26 PMIDC 2016-17 0.00 246.63 246.63
H DEFENCE SERVICES WELFARE
27 Punjab Ex-servicemen Corporation 2015-16 0.00 0.00 0.00
I HOME
28 Punjab Police Housing Corporation 2016-17 0.00 0.00 0.00
J COOPERATION
29 MILKFED 2015-16 0.00 66.50 66.50
30 SUGARFED 2015-16 1139.29 0.00 1139.29
31 MARKFED 2015-16 0.00 1227.23 1227.23
Page | 123
32 HOUSEFED 2015-16 0.00 191.65 191.65
33 Punjab State Co-op. Agri. Dev. Bank 2016-17 0.00 200.00 200.00
34 Punjab State Co-operative Bank 2015-16 0.83 5828.02 5828.85
35 PUNCOFED 0.00 0.00 0.00 0.00
K SCIENCE & TECHNOLOGY
36 Punjab Pollution Control Board 0.00 0.00 0.00 0.00
37 Punjab Energy Development Agency 0.00 0.00 0.00 0.00
L DEVELOPMENT
38 Punjab Infrastructure Dev. Board 2015-16 0.00 0.00 0.00
39 Punjab Roads & Bridges Dev. Board 0.00 0.00 0.00 0.00
M HEALTH
40 Punjab Health System Corp. 2016-17 0.00 0.00 0.00
N HOUSING
41 Punjab Urban Planning & Dev. Authority 2015-16 0.00 325.16 325.16
O ALREADY CLOSED UNITS
42 Punjab State Leather Dev. Corp. 2004-05 0.00 0.00 0.00
43 PUNTEX 2014-15 0.00 0.00 0.00
44 Punjab. State Hosiery &Knitwear Dev. Corp 2005-06 0.00 0.00 0.00
45 Punjab. Poultry Development Corporation 2016-17 0.00 0.00 0.00
46 Punjab Tourism Development Corporation 2015-16 0.00 0.00 0.00
Total 17030.92 23824.36 39624.87
Source: Collected from respective PSUs
Page | 124
Annexure VII: DETAILED STATEMENT OF GUARANTEES GIVEN BY THE GOVERNMENT
Guarantees given by State Government for repayment of loans etc. raised by statutory Corporations/boards, Government Companies, Local
Bodies, Co-operative Banks and societies during the year and sums guaranteed outstanding on 31st March 2017 in various sectors are shown
below (In Lacs):
Invoked
during the Guarantee
year /commission fee
S Name of Corporations Class Maxim Outstan Additi Deletion Discharged Not Outstan Paid
r. (No. of um ding at on during Discha ding at Payabl
N Guarante Amoun the durin the year rged the end e
o. es)(a) t beginni g the of the
Guaran ng of year year
teed the (Principa
during year l)
the
year
1 BACKFINCO 0 0 6530.09 600 301 6829.09
2 Punjab Forest development corporation 0 0 1178 1178 0 0 0 0 0
3 Punjab State industrial development 60910. 60910.5 0 264 0 0 60646 0 2663

corporation 5
4 PMIDC 2 85000 34631 5000 9928 0 0 29703 0 0
5 MILKFED 0 0 1249.4 0 0 0 0 1249.4 0 0
6 PUNSUP 0 0 963840 5961 930350 0 0 39451 0 0
7 Punjab Schedule Class and Land loan from 2000 2853.14 0 0 360.2 0 2492.94 0 0
Development Corporations national
corporatio
n
8 Punjab State Warehouing Corporations 0 0 462021. 0 460821.0 0 0 1200 0 0
08 8
9 Punjab State Cooperative Agricultural 110165 233210 53830 50177 0 0 236863 0 0
Development Bank 0
1 PIDC 404995. 31356 322172.9 396386.9
0 62 4.25 1 0 0 6 0 0
Page | 125
1 Punjab Agro Industries corporation 0 2712.6 1200 1000 470 0 0 1730 0
1 3
1 Punjab State Water Supply and 0 323.9 0 300.9 0 0 23 0 57.008
2 Sewearge Board 52
1 Markfed 0 0 932252 0 918722 0 0 13530 0 0
3
1 Punjab Khadi and Gram Udyog 0 0 957 0 0 0 957 957 0 0
4
1 PUNGRAIN 807432 0 683154 124278 0 0 0 0
5
1 Punjab State Transmission Corporation 0 156112 82686 35000 19613 0 0 98073 1000 0
6
1 Punjab Agro Foodgrains Corporation 572384 0 561247 0 0 11137 0 0
7
1 Punjab Mandi Board 0 30000 23800 23250 10320 0 0 36730 0 664
8
1 Punjab Financial Corporation 17225.3 2366.3 0 0 0 19591.65 0 0
9 5
2 Punjab Rural Development Board 1 90000 77230 17980 47990 0 0 209040 0 1800
0 0
2 PUDA 6 0 136851 29671. 25174 0 0 141348.8 0 0
1 88 8
2 POWERCOM 0 0 858114 16932 273605 0 0 753835 2000 2500
2 6
Total 152838 568187 81936 4315787. 2060816. 7684.0
5.13 4.08 9.43 89 124638.2 957 92 3000 0852
* There was a outstanding amount of rupees 683154 lac on 10.03.2017 same has been transfer as term loan in the name of Government of Punjab.
* Revolving Guarantee
Page | 126
Annexure- VIII Punjab Infrastructure Development Board (PIDB)
Sr. 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-
Particulars unit 2006-07 2007-08
No 09 10 11 12 13 14 15 16 17
1304.3 1191.3 1177.3 2635.9 2193.2
1 Total Revenue Rs crore 181.28 219.76 620.7 741.95 619.94 687.38
7 6 8 7 5
2 Total Interest Paid Rs crore 0 2.91 15.11 105.48 105.48 105.48 105.48 105.48 105.48 108.4 214.35
3 Long Term Loan Repayment Rs crore 0 0 0 0 0 0 0 0 0 88.13 670.88
4 Intt. $ LTL Repayment (2+3) Rs crore 0 2.91 15.11 105.48 105.48 105.48 105.48 105.48 105.48 196.53 885.23

5 Rs crore 0 0 0 0 0 0 0 0 0 0 0
Repayments

6 Rs crore 0 2.91 15.11 105.48 105.48 105.48 105.48 105.48 105.48 196.53 885.23
repayments
7 repayment to total revenue % 0 1.32 2.43 14.22 17.01 15.35 8.09 8.85 8.96 7.46 40.36
(Sr 6 /Sr1*100)
8 % 0 1.32 2.43 14.22 17.01 15.35 8.09 8.85 8.96 7.46 40.36
capital to total revenue
(Sr 4/Sr1*100)
9 % 0 1.32 2.43 14.22 17.01 15.35 8.09 8.85 8.96 4.11 9.77
Page | 127
Annexure- IX Punjab Municipal Infrastructure Development Company (PMIDC)
2010- 2012- 2015-

Sr. No Particulars unit 2009-10 2011-12 2013-14 2014-15 2016-17
11 13 16
1 Total Revenue Rs crore 0.09 0.48 1.14 2.58 2.63 12.42 1.73 1.1
2 Total Interest Paid Rs crore 6.12 36.85 29.46 45.66 42.06 28.63
3 Long Term Loan Repayment Rs crore 32 52 126 234.32 99.28 99.28
4 Intt. $ LTL Repayment (2+3) Rs crore 0 0 38.12 88.85 155.46 279.98 141.34 127.91
5 Working Capital Loans Repayments Rs crore 0 0 0 0 0 0 0 0
6 Interest and total debt repayments Rs crore 0 0 38.12 88.85 155.46 279.98 141.34 127.91
Total interest and Debt repayment
7 % 0.00 0.00 3343.86 3443.80 5911.03 2254.27 8169.94 11628.18
to total revenue (Sr 6 /Sr1*100)
8 without working capital to total % 0.00 0.00 3343.86 3443.80 5911.03 2254.27 8169.94 11628.18
revenue (Sr 4/Sr1*100)
Total interest to total revenue (Sr
9 % 0.00 0.00 536.84 1428.29 1120.15 367.63 2431.21 2602.73
2 /Sr1*100)
Note: The interest and Principal paid on Long term loans is paid from PMIDF fund so the amount of interest paid not debited against the revenue earned
by PMIDC . Therefore the ratio of row numbers 7,8,&9 is not appopriate
Page | 128
Annexure- X MARKFED
Sr.
Particulars unit 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
No
10641.0 13135.7 12861.8 12939.1 13384.1

1 Total Revenue Rs crore 3619.23 4689.21 5530.17 7528.37 9057.91 9235.07
5 1 3 9 3
2 Total Interest Paid Rs crore 201.16 360.27 661.61 861.26 913.27 1264.71 1586.92 1600.86 1582.22 1550.19 1473.37
Long Term Loan

3 Rs crore 0 0 0 0 0 0 0 0 0 0 0
Repayment
Intt. $ LTL Repayment
4 Rs crore 201.16 360.27 661.61 861.26 913.27 1264.71 1586.92 1600.86 1582.22 1550.19 1473.37
(2+3)
Working Capital Loans 15903.2 17906.0 19981.6 17802.9 21383.6 14860.1 13270.1
5 Rs crore 10206.02 8580.03 9352.07 6641.5
Repayments 9 1 9 8 9 4 8
Interest and total debt 10013.6 16764.5 18819.2 22984.5 16442.3 14743.5
6 Rs crore 10407.18 8940.3 21246.4 19389.9 8191.69
repayments 8 5 8 5 6 5
7 repayment to total % 288 191 181 223 208 230 182 175 128 63 110
repayment without
8 % 5.56 7.68 11.96 11.44 10.08 13.69 14.91 12.19 12.30 11.98 11.01
working capital to total
9 % 5.56 7.68 11.96 11.44 10.08 13.69 14.91 12.19 12.30 11.98 11.01
Page | 129
Annexure- XI PUNGRAIN
Sr. 2006- 2007- 2008- 2009- 2010- 2011- 2012-

Particulars unit 2013-14 2014-15 2015-16
No 07 08 09 10 11 12 13
3543.4 4902.5 6667.6 8340.3 8516.5 9644.9 11987.9 12583.0 13977.3
1 Total Revenue Rs crore 3060.9
4 4 1 2 1 1 9 3 6
1040.9 1216.2
2 Total Interest Paid Rs crore 108.62 204.28 407.65 574.82 714.38 1281.02 1309.64 1430.1
1 9
3 Long Term Loan Repayment Rs crore 0 0 0 0 0 0 0 0 0 0
1040.9 1216.2
4 Intt. $ LTL Repayment (2+3) Rs crore 108.62 204.28 407.65 574.82 714.38 1281.02 1309.64 1430.1
1 9
Working Capital Loans 1398.0 1822.5 3478.8
5 Rs crore 318.16 797.28 4646.9 3572.9 5921.49 5226.55 1878.25
Repayments 7 4 3
Interest and total debt 1001.5 1805.7 2397.3 4193.2 5687.8 4789.1
6 Rs crore 426.78 7202.51 6536.19 3308.35
repayments 6 2 6 1 1 9
7 repayment to total revenue % 13.94 28.27 36.83 35.96 50.28 66.79 49.66 60.08 51.94 23.67
(Sr 6 /Sr1*100)
repayment without
8 % 3.55 5.77 8.32 8.62 8.57 12.22 12.61 10.69 10.41 10.23
9 % 3.55 5.77 8.32 8.62 8.57 12.22 12.61 10.69 10.41 10.23
Page | 130
Annexure- XII Punjab Rural Development Board (PRDB)
Sr. 2006- 2007- 2008- 2010- 2011- 2012- 2013- 2014- 2015- 2016-
Particulars unit 2009-10
No 07 08 09 11 12 13 14 15 16 17
1 Total Revenue Rs crore 348.81 393.76 575.69 655.41 632.69 638.41 826.03 747.47 757.6 879.02 933
Long Term Loan

3 Rs crore 111.5 113.82 112.37 173.24 280.58 347.64 411.67 400 420.5 289.65 407.9
Repayment
4 Rs crore 138.93 147.71 153.35 227.51 358.8 485.97 573.88 522.37 494.28 352.92 522.33
(2+3)
5 Rs crore 0 0 0 0 0 0 0 0 0 0 0
Repayments
6 Rs crore 138.93 147.71 153.35 227.51 358.8 485.97 573.88 522.37 494.28 352.92 522.33
repayments
7 repayment to total % 39.83 37.51 26.64 34.71 56.71 76.12 69.47 69.89 65.24 40.15 55.98
repayment without
8 % 39.83 37.51 26.64 34.71 56.71 76.12 69.47 69.89 65.24 40.15 55.98
9 % 7.86 8.61 7.12 8.28 12.36 21.67 19.64 16.37 9.74 7.20 12.26
Page | 131
Annexure- XIII Punjab Urban Planning & Development Authority (PUDA)
Sr. 2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-
Particulars unit
No 07 08 09 10 11 12 13 14 15 16 17
1 Total Revenue Rs crore 186.85 301.47 754.03 286.73 309.23 132.63 239.3 325.34 774.46 749.48 669.19
2 Total Interest Paid Rs crore 0 0 0 0 0 0 1.9 154.93 197.63 184.86 161.95
3 Long Term Loan Repayment Rs crore 0 0 0 0 0 0 0 20.04 278.86 353.43 293.41
4 Intt. $ LTL Repayment (2+3) Rs crore 0 0 0 0 0 0 1.9 174.97 476.49 538.29 455.36

5 Rs crore 0 0 0 0 0 0 0 0 0 0 0
Repayments
6 Rs crore 0 0 0 0 0 0 1.9 174.97 476.49 538.29 455.36
repayments
7 repayment to total revenue % 0.00 0.00 0.00 0.00 0.00 0.00 0.79 53.78 61.53 71.82 68.05
(Sr 6 /Sr1*100)
8 % 0.00 0.00 0.00 0.00 0.00 0.00 0.79 53.78 61.53 71.82 68.05
capital to total revenue (Sr
4/Sr1*100)
9 % 0.00 0.00 0.00 0.00 0.00 0.00 0.79 47.62 25.52 24.67 24.20
Page | 132
Annexure- XIV Greater Mohali Area Development Authority (GMADA)
Sr.
Particulars unit 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
No
1 Total Revenue Rs crore 37.5 398.77 635.49 187.18 742.47 1100.63 1136.58 716.16 1120.22 1049.65 852
2 Total Interest Paid Rs crore 0 0 0 0 39.41 53.64 152.73 166.92 208.38 228.92 275.15
Long Term Loan

3 Rs crore 0 0 0 0 423.29 244.59 280.5 190.81 1286.72 0 843.5
Repayment
4 Rs crore 0 0 0 0 462.7 298.23 433.23 357.73 1495.1 228.92 1118.65
(2+3)
5 Rs crore 0 0 0 0 0 0 0 0 0 0 0
Repayments
6 Rs crore 0 0 0 0 462.7 298.23 433.23 357.73 1495.1 228.92 1118.65
repayments
repayment without
8 % 0.00 0.00 0.00 0.00 62.32 27.10 38.12 49.95 133.46 21.81 131.30
9 % 0.00 0.00 0.00 0.00 5.31 4.87 13.44 23.31 18.60 21.81 32.29
Page | 133
Annexure- XV Punjab Road Transport Corporation (PRTC)
Sr. 2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-
Particulars unit
No 07 08 09 10 11 12 13 14 15 16 17
1 Total Revenue Rs crore 437.73 443.73 236 245.35 289.41 319.48 340.84 376.12 376.77 413.02 458
3 Long Term Loan Repayment Rs crore 3.84 8.09 8.02 9.68 10.83 9.92 18.54 13.64 11.96 6.81 7.2
4 Intt. $ LTL Repayment (2+3) Rs crore 11.44 13.84 17.25 19.55 21.99 17.84 28.04 22.25 20.55 16.84 18.32

5 Rs crore 0 0 0 0 0 0 0 0 0 0 0
Repayments
6 Rs crore 11.44 13.84 17.25 19.55 21.99 17.84 28.04 22.25 20.55 16.84 18.32
repayments
7 repayment to total revenue % 2.61 3.12 7.31 7.97 7.60 5.58 8.23 5.92 5.45 4.08 4.00
(Sr 6 /Sr1*100)
8 % 2.61 3.12 7.31 7.97 7.60 5.58 8.23 5.92 5.45 4.08 4.00
capital to total revenue (Sr
4/Sr1*100)
9 % 1.74 1.30 3.91 4.02 3.86 2.48 2.79 2.29 2.28 2.43 2.43
Page | 134
Annexure- XVI PUNSUP
SN Particulars unit 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
1 Total Revenue Rs crore 3618.67 4450.23 5170.94 6591.24 7921.16 8901.35 9967.01 12159.76 10835.25 11817.89
2 Total Interest Paid Rs crore 194.13 295.26 551 804.42 838.99 1133.7 1413.54 1426.79 1391.41 1103.48
Long Term Loan

3 Rs crore 0 0 0 0 0 0 0 0 0 0
Repayment
4 Rs crore 194.13 295.26 551 804.42 838.99 1133.7 1413.54 1426.79 1391.41 1103.48
(2+3)
5 Rs crore 2579.75 3882.52 3493.97 4419.52 6266.11 7197.33 6532 9037.93 8196.62 9258.92
Repayments
6 Rs crore 2773.88 4177.78 4044.97 5223.94 7105.1 8331.03 7945.54 10464.72 9588.03 10362.4
repayments
7 repayment to total % 76.65 93.88 78.23 79.26 89.70 93.59 79.72 86.06 88.49 87.68
repayment without
8 % 5.36 6.63 10.66 12.20 10.59 12.74 14.18 11.73 12.84 9.34
9 % 5.36 6.63 10.66 12.20 10.59 12.74 14.18 11.73 12.84 9.34
Page | 135
Annexure- XVII Punjab Agricultural Marketing Board (Mandi Board)
2007- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-

SN Particulars unit 2006-07 2008-09
08 10 11 12 13 14 15 16 17
1 Total Revenue Rs crore 180.27 228.44 388.6 375.28 413.3 426.96 505.7 528.78 751.33 558.11 485.25
2 Total Interest Paid Rs crore 8.8 10.86 16.13 31.73 29.63 34.83 31.08 20.73 36.51 26.79 36
Long Term Loan

3 Rs crore 22.83 24.99 51.57 48 108.47 96.9 112.42 100 160 100 103.2
Repayment
Interest $ LTL Repayment
4 Rs crore 31.63 35.85 67.7 79.73 138.1 131.73 143.5 120.73 196.51 126.79 139.2
(2+3)
5 Rs crore 0 0 0 0 0 0 0 0 0 0 0
Repayments
6 Rs crore 31.63 35.85 67.7 79.73 138.1 131.73 143.5 120.73 196.51 126.79 139.2
repayments
repayment without
8 % 17.55 15.69 17.42 21.25 33.41 30.85 28.38 22.83 26.15 22.72 28.69
9 % 4.88 4.75 4.15 8.46 7.17 8.16 6.15 3.92 4.86 4.80 7.42
Page | 136
Annexure- XVIII Punjab State Transmission Corporation Limited (PSTCL)
Sr. No Particulars unit 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
1 Total Revenue Rs crore 408 534 895 1323 953 1177 883
2 Total Interest Paid Rs crore 124 179 216 269 374 477 519
3 Long Term Loan Repayment Rs crore 107 140 146 307 315 380 313
4 Intt. $ LTL Repayment (2+3) Rs crore 231 319 362 576 689 857 832
5 Working Capital Loans Repayments Rs crore 0 0 100 0 0 0 231
6 Interest and total debt repayments Rs crore 231 319 462 576 689 857 1063
Total interest and Debt repayment to

7 % 57 60 52 44 72 73 120
total revenue (Sr 6 /Sr1*100)
8 without working capital to total % 57 60 40 44 72 73 94
Total interest to total revenue
9 % 30 34 24 20 39 41 59
(Sr 2 /Sr1*100)
Page | 137
Annexure – XIX: Summary of Various Bonds raised by PIDB - As on 31.05.2017
Put
Tenure Call/Buy Outstanding Put & Repayment Amount
Sr. Bond Amount Date of Rate of Repayment (in crores)
of Back of Bonds Repayment Call
No. Series (Crore) Allotment Interest Dates
Bonds Bonds (Crore) Option
(Crore) Interest Principal
Was
PIDB In 3 Equal
available
Bonds Installments
at the
Series-I starting
1. 150 06.08.2007 10.07% 10 Years 119.07 30.93 end of 06.08.2017 3.11 30.93
(Regular from the
8th Year
Return end of 8th
(i.e. on
Bonds) year
06.08.15)
27.12.2018 - 216.70
27.12.2019 - 216.70
27.12.2020 - 216.70
PIDB In 10 Equal
Bonds Installments 27.12.2021 - 216.70
Series-II starting 27.12.2022 - 216.70
2. 499.93 27.12.2007 10.19% 20 Years - 499.93 None
(Deep from the 27.12.2023 - 216.70
Discount end of 11th 27.12.2024 - 216.70
Bonds) year
27.12.2025 - 216.70
27.12.2026 - 216.70
27.12.2027 - 216.70
15.10.2017 4.50 -
15.10.2018 4.50 -
PIDB In 10 Equal 15.10.2019 4.50 -
Bonds Installments 15.10.2020 4.50 -
Series-III starting
3. 150.03 15.10.2008 11.98% 25 Years - 150.03 None 15.10.2021 4.50 -
(Deep from the
Discount end of 16th 15.10.2022 4.50 -
Bonds) year 15.10.2023 4.50 -
15.10.2024 4.50 112.50
15.10.2025 4.05 112.50
Page | 138
15.10.2026 3.60 112.50
15.10.2027 3.15 112.50
15.10.2028 2.70 112.50
15.10.2029 2.25 112.50
15.10.2030 1.80 112.50
15.10.2031 1.35 112.50
15.10.2032 0.90 112.50
15.10.2033 0.45 112.50
31.12.2017 - -
PIDB In 5 Equal 31.12.2018 9.15 -
Bonds Installments At the 31.12.2019 9.15 15.98
Series-IVA starting end of 31.12.2020 7.32 15.98
4. 252 31.12.2008 11.45% 15 Years 79.90
(Regular 172.10 from the 10th
Return end of 11th Year 31.12.2021 5.49 15.98
Bonds) year 31.12.2022 3.66 15.98
31.12.2023 1.83 15.98
19.01.2018 23.63 -
PIDB In 5 Equal 19.01.2019 23.63 -
Series-IVB starting end of 19.01.2021 18.91 41.28
5. 442 19.01.2009 11.45% 15 Years 206.40
Bonds) year 19.01.2023 9.45 41.28
19.01.2024 4.73 41.28
16.02.2018 2.14 -
PIDB In 5 Equal 16.02.2019 2.14 -
Series-IVC starting end of 16.02.2021 1.71 3.74
6. 56 16.02.2009 11.45% 15 Years 18.70
Bonds) year 16.02.2023 0.86 3.74
16.02.2024 0.43 3.74
Total 1549.96 564.07 985.89 224.82 3,627.93
Page | 139
Note(s): -
(i) In Case of PIDB Bonds Series-I, Put option was exercised by Bondholders holding principal amount of Rs. 88.13 crores & two installments of
principal amount of Rs. 30.94 crores has been paid by PIDB and now the principal amount outstanding against Rs. 150 crores is only Rs. 30.93
crores.
(ii) In Case of PIDB Bonds Series-IVA, IVB & IVC, various Bondholders gave their consent for the Buy-Back of PIDB Bonds & the principal amount
outstanding against these Bonds is now Rs. 305 crores, since PIDB bought back Bonds of Rs. 445 crores till date out of Rs. 750 crores.
Page | 140
Annexure – XX : Details of Loans sanctioned/ availed by PIDB and latest position
(A) Loan Phase I - Rs. 1600 crores + Loan Phase II - Rs. 900 crores + Loan Phase III - Rs. 700 crores + Loan Phase IV - Rs. 900 crores = Total Rs. 4100
crores
Loan
Loan Outstanding
SN Name of Banks Loan Sanctioned Availed till Rate of Interest
re-paid Loan
date
1. Bank of India 500.00 365.42 72.80 292.62 9.25% (MCLR 9.25% + 0.00% spread)
2. ICICI Bank 300.00 300.00 43.75 256.25 9.34% (Base Rate 9.10% + 0.24% spread)
3. Oriental Bank of Commerce 300.00 293.25 47.11 246.14 9.40% (MCLR 8.60% + 0.80% spread)
4. Indian Bank 200.00 200.00 29.17 170.83 9.25% (MCLR Rate 8.60% + 0.65% spread)
5. UCO Bank 200.00 162.16 33.34 128.82 9.25% (MCLR 8.60% + 0.65% spread)
Total 1,500.00 1,320.83 226.17 1,094.66
6. HDFC Bank 100.00 100.00 4.16 95.84 9.19% (Base Rate 9.00% + 0.19% spread)
7. Andhra Bank 200.00 200.00 - 200.00 9.55% (MCLR 9.55% + 0% spread)
8. Indian Bank 300.00 300.00 - 300.00 9.55% (MCLR 9.45% + 0.10% spread)
9. UCO Bank 100.00 100.00 - 100.00 9.60% (MCLR 9.45% + 0.15% spread)
10. Punjab National Bank 300.00 300.00 - 300.00 9.55% (MCLR 9.55% + 0.00% spread)
Total 1,000.00 1,000.00 4.16 995.84
11. Canara Bank 500.00 500.00 - 500.00 9.30% (MCLR 9.30% + 0.00% spread)
12. UCO Bank 200.00 150.00 - 150.00 9.30% s(MCLR 9.30% + 0.00% spread)
Total 700.00 650.00 - 650.00
13. Union Bank of India 200.00 30.10 - 30.10 9.30% (MCLR 9.30% + 0.00% spread)
14. Punjab National Bank 200.00 129.00 - 129.00 9.15% (MCLR 9.15% + 0.00% spread)
15. Canara Bank 500.00 43.00 - 43.00 8.45% (MCLR 8.45% + 0.00% spread)
Total 900.00 202.10 - 202.10
Grand Total of Loan 4,100.00 3,172.93 230.33 2,942.60
Page | 141
Annexure XXI Fund Flow Statement
(Rs in crores)
SN PARTICULARS 2017-18
1 Expected Receipt of RDF 820.00
Total Receipt -I 820.00
A INTEREST PAYMENTS ON LOANS A 186.13
B REPAYMENT OF LOANS B 466.80
C AMOUNT FOR OTHER EXPENDITURE C 20.00
Total Payments A+B+C - II 672.93
SURPLUS AVAILABLE FOR OTHER DEVELOPMENTAL WORKS (I-II) 147.07
Page | 142
Annexure- XXII Receipts and Expenditure of PRDB
(Rs. In crores)
Receipts Payments
Year Opening Excess of Receipt
( including loans (including repayment
over Payments
availed) of loans)
2005-06 120.00 516.32 448.83 187.49
2006-07 187.49 733.61 807.37 113.73
2007-08 113.73 439.90 499.44 54.19
2008-09 54.19 875.68 868.61 61.26
2009-10 61.26 1145.21 1041.73 164.74
2010-11 164.74 1357.70 1355.26 167.18
2011-12 167.18 1256.26 1306.57 116.87
2012-13 116.87 960.84 804.66 273.05
2013-14 273.05 872.43 968.24 177.24
2014-15 177.24 1174.35 1218.26 133.33
2015-16 133.33 1216.43 1111.56 238.20
Page | 143

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A

2 Why a White Paper? 7

4 Liability of Cash Credit Limit for Food Grains 59

5 Financial burden on account of UDAY Scheme 75

6 Public Sector Undertakings 81

7 Off Budget Funds 95

Number Name Chapter Name Chapter Page

1.2 Loans raised by State Entities Why a White 1 12

1.3 Outstanding Debt as on 31.03.2017 Why a White 1 15

1.4 True Financial Position -2016-17 Why a White 1 15

1.5 Important fiscal metrics Why a White 1 17

2 Unpaid Liabilities of State State Finance 2 29

3 Composition of Revenue Receipts State Finance 2 32

4 Share of Central Transfers State Finance 2 34

5 Total Revenue Receipts State Finance 2 35

6 Salaries, Pension and Interest State Finance 2 40

7 Share of Revenue and Capital State Finance 2 43

8 Trends in Revenue Deficit State Finance 2 45

9 Trends in Fiscal Deficit State Finance 2 46

10 Outstanding Debt to Total Revenue State Finance 2 48

11 Outstanding Debt and Expenditure on State Finance 2 48

12 Borrowings from Agencies (2016-17) State Finance 2 50

13 Government Guarantees State Finance 2 53

Number Name Chapter Name Chapter Page

15 Revenue Receipt - Actual v/s State Finance 2 55

16 Capital Expenditure- Actual v/s State Finance 2 56

17 Plan Outlay - Actual v/s Budgeted State Finance 2 56

18 Terms of Agreement of CCL Liability Of Cash 3 70

21 Receipts and Expenditure of Societies Off Budget Funds 6 98

22 Receipts and expenditure of Societies Off Budget Funds 6 99

23 Income & Expenditure of PIDB Off Budget Funds 6 101

24 Detail of debt raised by PIDB Off Budget Funds 6 101

25 Expenditure detail of Punjab Mandi Off Budget Funds 6 105

Numb Name Chapter Page

1 GSDP Growth Rate 2 21

2 Balance in Current Revenues 2 23

3 Components of State's Total Revenue Receipts - Punjab 2 30

4 Composition of Revenue Receipts (% to Total Revenue 2 31

5 Own Tax Revenue Receipts (2016-17) 2 33

6 Components of Expenditure (2006-07) 2 37

7 Components of Expenditure (2016-17) 2 37

8 Components of Revenue Expenditure 2 38

9 Total Revenue Expenditure (2006-07) 2 41

10 Total Revenue Expenditure (2016-17) 2 41

11 Revenue Deficit as % of GSDP 2 42

12 Fiscal Deficit as % of GSDP 2 46

Page | 1 Executive Summary

Page | 2 Executive Summary

Page | 3 Executive Summary

Page | 4 Executive Summary

These entities retain the revenues generated by various levies, in a separate

Page | 5 Executive Summary

Page | 6 Chapter 1: Why a White Paper?

WHY A WHITE PAPER?

Page | 7 Chapter 1: Why a White Paper?

Page | 8 Chapter 1: Why a White Paper?

WHY A WHITE PAPER?

1.0 A White Paper is defined as, "An authoritative report or guide

Page | 9 Chapter 1: Why a White Paper?

“…in the face of

1.3 Normally, budget documents and CAG Accounts for the

HUGE AMOUNT OF OUTSTANDING LIABILITIES

1.4 Apart from pending bills amounting to about `7791 crore,