The North News
Chandigarh/ New Delhi, October 1
A high-level Punjab government delegation has urged the 16th Finance Commission to provide a long-term rehabilitation package, citing the devastating floods this year and the state’s unique challenges as a frontline border region. The delegation, led by Finance Minister Harpal Singh Cheema, met Commission Chairman Dr Arvind Panagariya in Delhi on Tuesday. Chief Secretary KAP Sinha and Additional Chief Secretary (Home Affairs and Finance) Alok Shekhar were also part of the team.
Punjab reported losses of nearly ₹20,000 crore in crops, homes and infrastructure during the recent floods. Cheema said existing State Disaster Response Fund (SDRF) rules were too restrictive and called for greater flexibility, urging that the fund be made non-interest bearing, similar to the National Disaster Response Fund. Punjab’s SDRF currently holds an interest accumulation of ₹7,623 crore out of its ₹12,268 crore balance.
The minister also pressed for a border security package of ₹2,982 crore, arguing that Punjab continues to face “unique challenges” such as drone incursions, smuggling and narco-terrorism. He said the state has been investing in police modernisation and infrastructure to support the Border Security Force.
Cheema demanded a special industrial package worth ₹6,000 crore for the state’s border districts, which he said suffer from low per capita income and reduced industrial activity due to tensions with Pakistan. He cited losses of up to ₹8,000 crore annually after the closure of the Wagah trade corridor.
Raising fiscal concerns, the minister said Punjab had lost nearly ₹49,727 crore annually due to the Goods and Services Tax regime, with no compensation provided. He proposed increasing the states’ share in the divisible tax pool to 50% from 42% and including cesses, surcharges and select non-tax revenue.
Punjab also sought a developmental grant of ₹75,000 crore, similar to the revenue deficit grants extended by the previous Finance Commission.
Cheema presented the state’s fiscal indicators, highlighting a revenue deficit of ₹23,957 crore and a fiscal deficit of ₹34,201 crore in 2025-26, with the debt-to-GSDP ratio at 44.5%. He said a favourable Finance Commission recommendation was critical to reversing Punjab’s economic disadvantages and meeting national security responsibilities.
Panagariya assured the delegation that the issues raised would be discussed with Commission members.
