Punjab Seeks Long-Term Flood Rehabilitation Package From Finance Commission

(MENAFN- IANS) New Delhi, Sep 30 (IANS) Punjab Finance Minister Harpal Cheema on Tuesday called on 16th Finance Commission Chairman Arvind Panagariya to seek the long-term rehabilitation package, citing the experience with devastating floods that caused an estimated damage of Rs 20,000 crore, particularly in border areas.

Cheema highlighted the strain placed on the state's finances due to its unique status as a frontline border state, natural calamities, and the structural disadvantages arising from the shift to the Goods and Services Tax (GST) regime.

He initiated the discussion by addressing the immediate need to reform the State Disaster Response Fund (SDRF) norms. He underscored that existing SDRF norms proved too restrictive and rigid, severely constraining the state's ability to provide timely and adequate relief.

"It is imperative that these guidelines be comprehensively reviewed to incorporate flexibility and provisions for state-specific disasters," he emphasised.

Furthermore, the Finance Minister stressed that the SDRF must be converted into a non-interest-bearing reserve fund, akin to the National Disaster Response Fund (NDRF), noting that the state's fund currently holds a gigantic interest accumulation of Rs 7,623 crore out of a total balance of Rs 12,268 crore.

The Finance Commission Chairman acknowledged the concern raised by Punjab and assured that it would be discussed with Commission members in a meeting.

Reiterating the demands put forth by the state in the previous meeting with the 16th Finance Commission, the Finance Minister also made an argument for dedicated financial support to states sharing a hostile border.

He said the heightened tensions with Pakistan, particularly in the wake of Operation Sindhoor, caused massive economic losses to the state's border districts through repeated disruptions to daily life, industrial activity, and the movement of goods.

"Punjab continues to face unique security challenges, including drone incursions, cross-border smuggling, and narco-terrorism, which demand constant, heavy investment in security and law enforcement," Cheema was quoted as saying.

He apprised the Chairman that the state is investing heavily in infrastructure and police modernisation to create an effective second line of defence in support of the Border Security Force (BSF). He requested a dedicated border area package to strengthen police forces and law enforcement infrastructure, for which the state has requested Rs 2,982 crore in its memorandum to the commission. He said this support is crucial for ensuring both national security and regional stability.

Finance Minister Cheema presented the state's latest fiscal indicators, noting a revenue deficit of Rs 23,957 crore and a fiscal deficit of Rs 34,201 crore in 2025-26, with the debt-to-GSDP ratio standing at 44.50 per cent.

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