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Expert turns tables on Punjab loan issue, says Centre must pay

S P Singh

Chandigarh

A retired state civil service officer has an idea to resolve one of Punjab's most convoluted financial problem – the debt incurred during terrorism years. And now top officials of Punjab see a ray of hope in this Rs 8,500-crore worth of an idea. 

In an interesting proposition in contrast to Punjab Government's pleas for waiver of the Special Term Loan incurred to combat insurgency, the Twelfth Finance Commission headed by Dr C Rangarajan was urged by  retired PCS officer P.S.Kumedan that it was constitutionally obligatory upon the Centre to reimburse Punjab for all the expenditure incurred to quell internal disturbance or terrorism. 

Just two days after the Finance Commission heard fiscal data-crunching babudom of Punjab make out a case for waiver of Special Term Loan remainder of Rs 3,772 crore, Kumedan met the Finance Commission members during the public hearings yesterday, presenting a detailed paper elaborating how Article 355 of the Constitution leaves no doubt about Centre's bounden duty to compensate Punjab. 

Senior officials of the Punjab Government said Kumedan has made a very valid point, and sources said Principal Secretary Finance K.R.Lakhanpal himself arranged for Kumedan's meeting with the Commission. 

"Not only Punjab does not owe any loan, the Centre has to pay over Rs 20,000 crore to the State," Kumedan said. 

Kumedan's point is simple, and was made unambiguously: As per Article 355, it is the duty of the Centre to protect the states against internal disturbance. If the terrorism in Punjab amounted to internal disturbance, Centre must pay for efforts to quell it. 

Article 355 states: "It shall be the duty of the Union to protect every State against external aggression and internal disturbance and to ensure that the Government of every State is carried on in accordance with the provisions of this Constitution." 

Speaking to The Indian Express soon after submitting his memorandum to the Commission, Kumedan, who was extensively consulted by the state government regarding SYL canal issue because of his expertise over legal domain concerning water disputes, said all the Punjab Government has to prove was that the terrorism indeed amounted to "internal disturbance"and was not just a public order disturbance.  

Public Order falls within the ambit of responsibilities of  the State Government as per Schedule VII, List II, item (1) of the Constitution. 

Kumedan quoted Constitutional expert H.M.Seervai to buttress his argument and said the Centre passed legislations like TADA, Disturbed Areas Act etc and described the situation in Punjab during those years as 'proxy war', 'nation's war against terrorism', 'insurgency', 'terrorism', 'separatism', 'secession' etc. 

While imposing President's Rule in Punjab on October 6, 1983, the reason given was  "failure to suppress terrorism created by supporters of Khalistan." Barnala Government was dismissed "for failing to combat terrorism." 

Finance Commission was told that Punjab Police had only helped the Union in fighting against this ‘internal disturbance' and additional expenditure on Punjab Police beyond normal expenditure as in 1982-83 shall have to be borne by the Centre. "Article 258 (3) of the Constitution is very clear on this," Kumedan said, adding, "In case there was a dispute regarding the sum, Article 258 (3) provides that it be determined by an arbitrator appointed by the Chief Justice of India."

Kumedan also referred to the Constitution Assembly debates in this connection and observations of Dr B.R.Ambedkar who had explained reasons behind Article 355, a novel idea and proposition which otherwise did not find any place in Government of India Act 1935 but figured as Article 277-A in the initial drafts. 

Sometimes, an idea can do wonders. Will this one pull Punjab out of the morass of debt?■

July 25, 2004

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