Observing delays in the repayment of loans and interest payments by states and their agencies, the finance ministry has asked all Central ministries to enforce fiscal discipline and follow up with states for the timely recovery of loans.
“Budget division, ministry of finance, department of economic affairs has observed delays in repayments of principal and interest amount of loans and advances including pass-through assistance and back-to-back loans provided by Central government to states/UTs/state agencies,” according to an office memorandum issued by the Controller General of Accounts (CGA).
“Gol is obligated to repay external assistance on the due date, the delays in concurrent repayment from states/ UTs/state agencies have significant fiscal implications for Gol.”
The Centre provided Rs 29,580 crore through externally-aided project loans in FY23 and it is estimated to provide another Rs 24,550 in FY24BE to states and their agencies. The recovery of loans was loans was Rs 23,500 crore in FY23 and it is estimated to be Rs 23,000 in FY24.
The CGA also asked all ministries/departments to strictly monitor repayment of loans/Government of India dues from foreign governments/states/UTs/state agencies/PSUs on a regular basis, and inform about details of unpaid dues, including reasons thereof, to the administrative secretary.
The CGA will review the status of repayments/recovery of the Central government dues with all ministries on a quarterly basis.
“It is requested that an initial report on all loans with non-receipt/delayed receipt of principal amount/interest may be furnished by May 31, 2023, to enable submission of the consolidated report by this office to the secretary, department of expenditure,” it said.