RBI Stops Payment to Punjab Due to Default on Overdrafts

The newly formed Punjab government is now worried to manage state funds as the hard-hitting news of Reserve Bak of India (RBI) stopping the payments to Punjab with immediate effect has shaken every department. The RBI has taken this decision due to defaulting on overdrafts in the state for more than 14 days.

The Congress Ministers are blaming the past SAD led state government for the overdrafts as they had started many development projects across the state in a hush- hush situation, without even thinking about the repercussions in future. The new Punjab government which is just taken over by Captain Amarinder Singh as Chief Minister is now facing a challenge to repay back the money to the RBI.

How much is the overdraft on Punjab government

Capt. Amarinder will hold a meeting with the Punjab Infrastructure Development Board (PIDB) on Saturday to discuss repaying of Rs 760 crore, which is overdrafted after exhausting ways and means advance (WMA) limit of Rs 925 crore. The state has to now repay a total of Rs 1,680 crore to the RBI.

The state is now in a state of fiscal crisis as the previous government had exhausted the Punjab Infrastructure Development Board funds and rural development funds for six years, leaving no balance in the state treasury.

How will it affect the state

  • The financial crunch will affect the ongoing development work across the state.
  • The new government is facing problem in clearing the monthly salaries and pensions of the government employees which come out to Rs 1800 crore.

Let’s wait and watch that how the Punjab government will tackle this problem with the commencement of the new financial year.

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Yamini S. Verma

A dreamer and a go-getter, this is how she defines herself. With seven- plus years of experience in Journalism, Yamini has worked with various publications in print and online. With an inclination towards photography, she dreams to go on around the world tour someday and capture the beauty of nature through her lens. You can write to her at hello@chandigarhmetro.com