To keep going, Punjab local bodies dept to sell off ‘unattended’ assets

In a bid to stay afloat, financial crisis-hit Punjab local bodies department has directed all the 28 improvement trusts in the state to create an annual calendar to sell off their assets that have been lying unattended for the past several years, thus leading to liabilities.

Also, the department has asked the municipal corporations and other civic bodies to prepare an inventory of such assets. The estimated revenue to be generated from the sale of properties by the improvement trusts will be ₹124 crore, ₹154 crore and ₹130 crore in October, November and December in the current calendar year.

The move comes two days after finance minister Manpreet Singh Badal along with his counterparts of Delhi, Rajasthan, West Bengal and Kerala (all ruled by non-BJP parties) asked Union finance minister Nirmala Sitharaman to release their Goods and Service Tax (GST) dues without delay. They had flagged this during a meeting of the empowered committee of state finance ministers. According to Manpreet, the Centre is yet to release ₹4,100 crore dues to Punjab.

The local bodies department’s decision is expected to give some respite in the middle of a deepening financial crisis in the state at a time when expenditures have surpassed the revenues generation.

The state is witnessing low non-tax revenue generation as it has been able to collect only 13.98% (₹1,325 crore) of the total estimated collection of ₹9,477 crore till September-end.

Local bodies minister Brahm Mohindra said, “If all goes well, we can fund the development projects of the government. The department has a large number of properties leased out on nominal rentals. We will come up with a one-time settlement scheme with those having rented these properties. Some improvement trusts such as Jalandhar have some liabilities. I have also instructed the trust heads to clear their borrowings.”

The Amritsar Improvement Trust (AIT), which has a large asset base, is learnt to have funded some projects of the local municipal corporation. Local bodies department officials said as per the inventory of properties, the Patiala and Bathinda improvement trusts also have good potential.

The amount from the sale of properties will be recovered in four years, as the improvement trusts get one-fourth of total revenue as earnest money in the month when the sale is made.

“By the start of the 2020 financial year, the monthly recoveries are expected to touch ₹200 crore and it can go even beyond that if the market scenario remains favourable,” Mohindra said.

After taking charge of the local bodies department in June this year, Mohindra had instructed all urban local bodies to prepare an inventory of the properties they own.

Speaking to HT, KR Lakhanpal, a former bureaucrat who headed the finance department, said financial situation of the state is bad. “We need a strong political will to get out of this mess If state’s political economy is working, why development is not happening? We have to overcome this challenge,” he said