Centre directs RBI to withdraw Rs. 1417 crore from Jharkhand funds to settle dues

Photo Credits: Hindustan Times

The Central Government has issued an order to the Reserve Bank of India (RBI) to auto-withdraw a sum of Rs. 1417.50 crore from the funds maintained in the bank account of Jharkhand government as the first installment of the issued loan for Damodar Valley Corporation (DVC), a central public sector power generator.

The officials mentioned about the communication that happened on October 8 where the central power department invoked the RBI about the tripartite agreement (TPA) which was signed among the Centre, the Jharkhand Government, and the RBI on April 27, 2017 which was regarding the payment security mechanism with the outstanding dues of Rs. 5608.32 crore as of August 13, 2020.

The Centre asserted that the time period in the notice period to the statement expired and the response regarding the pending dues by JBVNL to DVC was not appealing. Jharkhand Bijli Vitran Nigam Limited is the state’s largest power distribution company.

The letter directed by the power department to RBI reads, “Accordingly, in terms of provisions of clause 7.3 of the TPA, I consider this a fit case for invoking TPA and accordingly request you to take further action to debit an amount of Rs 1417.50 crore in the month of October, 2020 from the account of state government being maintained by the RBI and credit it into the account of Ministry of Power, Government of India for onward transfer into the account of the DVC.”

In response, the state government contended that DVC is supposed to pay Rs. 360.36 crore to the state government pertaining to the mining activity at the Bermo mines. The state government also indicated that it has applied for Rs. 1,841 crore from the consolidated fund representing Atmanirbhar Bharat for clearing the dues.

Chief minister Soren was highly disappointed, “It’s a veiled conspiracy by the Centre to provoke and trap the state government to increase its borrowing from markets and other instruments in these times of economic instability and fiscal difficulties being faced by the state. BJP’s previous Raghubar Das government through the TPA signed in 2017 laid the foundation stone towards destroying the basic edifice of cooperative federalism.”