Its debt limit fast approaching, state may have to seek Centre’s help to stay afloat

Managing finances in Punjab has become an art of jugglery. The cash-starved finance department has been diverting funds from central schemes and holding back payments of government departments to ensure that it does not default on salaries. However, come 2010, the tightrope walk may become too hard to continue. The financial crisis, say sources in the department, will come to a head as early as the beginning of next year when the government may not even be able to pay salaries and pensions which together account for Rs 1,000 crore per month.

As it prepares to do a mid-term review of its ambitious annual plan worth Rs 8,400 crore, the state is unable to clear bills of infrastructure projects being undertaken under the annual plan by the public works, irrigation and public health departments. The state is hoping to meet these out of funds received this month under various central schemes such as Pradhan Mantri Gram Sadak Yojana (PMGSY), National Rural Health Mission (NRHM) and Accelerated Irrigation Benefit Programme (AIBP).

However, it is not delay in payments of bills for construction projects that is worrying the state. “Payments have been delayed but we are trying to ensure that there are funds for important sectors such as roads, irrigation and public health. We are also paying our share in Central schemes to make the most of funds being received under them,” says Finance Minister Manpreet Badal.

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