Govt takes Rs 100-cr loan
Loan schedule advanced to pay arrears
By Our Reporter
SHILLONG: The acute funds crunch has forced the State Government to borrow Rs 100 crore from the Reserve Bank of India (RBI), in order to pay arrears to its employees, teachers and pensioners.
In keeping up with promises, the Government plans to pay the arrears before December 20, at the onset of the Christmas festival.
“Normally, the State Government would borrow this amount from RBI during February and March, each year. This time, we are borrowing it much earlier, in November-December, to fulfill commitments regarding the pending arrears,” a senior Finance department official said on Wednesday.
The amount comes with interest of up to eight to nine per cent.
“In the past so many years, the Government has already paid Rs 200 crore as interest for the amount borrowed each year. Due to this, every year it would keep aside some amount for RBI interest payments,” the official added.
Around Rs 300 crore would be required for paying the pending arrears that include 40 per cent arrears for deficit school teachers, 30 per cent arrears for both Government employees and pensioners.
To further meet the requirements for these payments, the official added the Government will avail Rs 140 crore from the Centre as Non-Plan grants, in addition to its share from Central Taxes even as it has managed to save between Rs 70 crore to Rs 80 crore this year.
The savings accrued from the implementation of the 10 per cent cut on expenditure under the non-plan budget allotted to several departments.
“A combination of all these funds has made it possible for the Government to pay the pending arrears,” he said.
Implementation of the Fourth Pay Commission, according to a senior Government official, has landed the State in this position. Pending arrears, salaries and pensions have to be given to Government employees and teachers.
“The Government faces this problem after every pay commission. However, the situation will improve after two to three years of implementation of the new pay commission,” he said.
By 2012-2013, the State’s finances will improve immensely, from a huge jump of 30 per cent on the award from the Thirteenth Financial Commission, he added.
Source: The Shillong Times