Cabinet approved cash credit to Punjab for food procurement

Cabinet approved cash credit to Punjab for food procurement

Question: What percentage of state gross domestic product has the 14th Finance Commission pegged the fiscal deficit at, for award period 2015-20?
(a) 7 percent
(b) 9 percent
(c) 10 percent
(d) 3 percent
Ans (d)
Related Fact :

  • On 6th March, 2017, The Cabinet today approved settlement of legacy food cash credit accounts (up to crop season 2014-15) of Punjab government for food procurement operations.
  • This proposal of Department of Expenditure was approved by Prime Minister under Rule 12 of (Transaction of Business) Rules, 1961 on January 2, 2017
  • It further said that early settlement of legacy issues will help the banks in disbursement of food credit in the larger interest of numerous farmers of the state and uninterrupted continuity in food procurement operations to ensure food security for the nation.
  • The outstanding amount in Cash Credit Accounts of Punjab up to Kharif Marketing Season 2014-15 amounting to about Rs 31,000 crore shall be converted into a term loan.
  • It will be repayable in half yearly instalments over a period of 20 years with the option for pre-payment. The terms and conditions of the loan shall be as prescribed by the RBI and the lending banks.
  • Punjab government shall enter into a tripartite agreement with Government of India (GoI) and RBI irrevocably authorising the GoI to deduct, in case Punjab government fails to make any payment towards principal or interest of the term loan on due dates, such defaulted amount from the states share in central taxes and pay the same to SBI consortium.
  • It is notable that the 14th Finance Commission has prescribed the fiscal roadmap for each state for its award period 2015-20 and anchored their fiscal deficit to an annual limit of 3 per cent of states gross state domestic product.

Reference:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=158894