Eyeing a recovery of nearly Rs 110 crores, Punjab Cabinet on Monday approved a One Time Settlement (OTS) Policy giving the entrepreneurs of promoted and loanee companies last chance to settle their dues with Punjab State Industrial Development Corporation Limited (PSIDC) and Punjab Financial Corporation (PFC), but with a rider. The Cabinet has made it clear that no other OTS opportunity would be given to the defaulters hereafter.
The condition, regarding not providing any OTS opportunity in future, was approved by the Cabinet after the state Finance Minister Manpreet Badal suggested that this should be the last such OTS and the government should go hammer and tongs after those who fail to pay up even now.
The OTS policy will give the entrepreneurs of promoted and loanee companies one-time opportunity for settlement of their dues with PSIDC and PFC, and will help them recover Rs 80-100 crore and Rs 7 to 10 crore, respectively.
Besides releasing the blocked industrial assets, it will help in reducing the litigation of these corporations and generate revenues for their development activities.
“The decision to come out with OTS Policy-2018 followed representations and suggestions from Chamber of Commerce and Industries Association and after marathon discussions with the promoters for rehabilitation and revival of the industries in the State,” said the official spokesperson.
Spokesperson pointed out that under the OTS policy-2017, PSIDC did not receive any application for loan cases. However, a sum of Rs 3.99 crore was recovered by way of OTS for equity from two companies. PFC received offers for OTS from 25 loanees concerns having tentative OTS amount of Rs 2.72 crore, against which it has, so far, recovered Rs 1.57 crore, with the remaining being recovered in quarterly instalments.
Notably, the PSIDC extended term loans to 861 industrial units, of which 739 units have already settled with Corporation and only 122 units are pending, and all of them have already become non-performing assets.
Besides, PSIDC had made equity investment in 322 units, of which 245 collaborators have already settled their dues by way of buy back of their equity or settled their accounts under OTS, and only 77 promoted units are yet to buy way of equity investments.
Similarly, PFC extended term loans to 18,000 loanee concerns, of which 16,900 have settled their accounts and about 1,142 units are at present outstanding and the entire portfolio has been declared NPA.
Currently, the default position to the bond holders of PFC is Rs 151.95 crore, which includes Rs 101.31 crore as principal and Rs 50.64 crore in interest. The bondholders of PSIDC owe Rs 542.52 crore to it, inclusive of Rs 392.48 crore and Rs 150.04 on account of principal and interest respectively.
To boost industrial and economic activity in Punjab, the Cabinet has approved the setting up of a new international civil terminal at Indian Air Force (IAF) Station, Halwara, Ludhiana — fulfilling a long-pending demand of the state.
The demand was first raised by Capt Amarinder Singh with the Central Government during his previous tenure as the Chief Minister from 2002-2007. The matter, however, remained in abeyance pending clearances from the Centre.
A per the cabinet decision, the government would soon sign a Memorandum of Understanding (MoU) with the Airports Authority of India (AAI) for the same.
Civil Terminal would be developed jointly by the AAI and the State Government through the Greater Ludhiana Development Authority (GLADA) by setting up a Joint Venture Company (JVC) for the purpose with 51:49 percent stakes.
The Government would provide 135.54 acres land free of cost to the JVC by way of its equity in the project, and AAI would bear the capital expenditure on development of the new airport; whereas the expenditure on the operation, maintenance and repairs would be taken care of by the JVC.
PUNJAB WATER REGULATION AUTHORITY TO SAVE WATER
Aimed at ensuring judicious, equitable and sustainable utilisation and management of the state’s critical water resources, the Cabinet has approved the draft of Punjab Water Resources (Management and Regulation) Bill, 2018, to set up Punjab Water Regulation and Development Authority (PWRDA).
PWRDA, comprising a chairman besides two members to be appointed by the State Government, would be empowered to take all such measures as it deems necessary or expedient for the objective for which it is to be set up, and would have powers to issue directions and guidelines for the conservation and management of the water resources.
The Authority would also be empowered to issue tariff orders specifying the charges to be imposed by entities supplying water for drinking, domestic, commercial or industrial use.
The Bill further proposes an Advisory Committee on Water Resources, headed by PWRDA chairman to be notified by the Government, consisting of experts and ex-officio members from various government departments to advise the Authority. The Authority may also engage experts on its own. The Authority shall have and maintain a separate fund to be called the PWRDA Fund in which the grants or loans would be credited by the State Government.
MERGER OF 20 DCCBs WITH PSCB
To strengthen the state’s rural credit system and facilitate famers taking credit from the cooperative banks, Punjab Cabinet okayed the merger of 20 District Central Cooperative Banks (DCCBs) with the Punjab State Cooperative Bank (PSCB). With the Cabinet giving a green signal to change the state’s three-tier Cooperative Credit Structure into two-tier, by amalgamating the DCCBs with the PSCB, the latter has now become a larger entity bank — paving way for PSCB to play a greater role in the area of rural credit.
Official spokesperson said that the decision had been taken in view of RBI guidelines, which mandate that all DCCBs should have a minimum capital adequacy ratio of nine percent Capital to Risk Weighted Assets Ratio (CRAR). Although at present, the DCCBs are adhering to the required CRAR, there is hardly any space for majority of these DCCBs to enhance their business and to increase their profitability. Without further capital induction the CRAR stipulation given by the RBI cannot be met. Hence, the Cooperative Credit Structure in the State is facing severe hardships.
After amalgamation, the single entity will have capital adequacy in the range of 13-14 percent, allowing Cooperative Banks to increase their business while meeting RBI’s stipulation of capital adequacy.
It would increase the profitability of the Bank and help it to adopt the latest technology and give better delivery services to its customers as well as the farmers of the State. There are around none lakh farmers who are holding Kisan Credit Cards of the Cooperative Banks in the State and are dependent on credit in the prevalent Cooperative Structure.
CABINET PASSES SPECIAL RESOLUTION HAILING KARTARPUR CORRIDOR; DECIDES TO SET UP SPECIAL DERA BABA NANAK DEVELOPMENT AUTHORITY
Chandigarh: Passing a special resolution hailing Kartarpur corridor, Punjab Cabinet on Monday decided to set up special Dera Baba Nanak Development Authority for the development and beautification of the area in and around Dera Baba Nanak ahead of the 550th birth anniversary of Guru Nanak Dev. Chief Minister Capt Amarinder Singh has already announced a slew of development projects for the upgradation of infrastructure and facilities for the lakhs of pilgrims expected to visit the area during the historic occasion, for which the year-long celebrations were kicked off by the state government on Gurpurb, on November 23.
In its special resolution, the Cabinet also welcomed the opening of the Kartarpur Corridor as a historic step to mark the auspicious occasion.
The resolution stated that with the laying of the foundation stone for the corridor, a long-pending demand of the Punjabis had been fulfilled, thus paving the way for opening the way for devotees to visit the historic Kartarpur Gurdwara, close to the Line of Control.
The Cabinet, in its resolution, noted that the persistent efforts by Capt Amarinder Singh, which had culminated in the momentous decision to open the corridor.