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Pakistan owes Rs 300 crore to India since Independence. This is what the Budget document for 2013-14 says.
The Annexure 5 (i) of the Receipts Budget for 2013-14 deals with the ‘Statement of Liabilities of the Central Government’.
It shows the total liabilities at Rs 56,51,784.22 crore for 2013-14. From this, Rs 300 crore is deducted as ‘Amount due from Pakistan on account of share of pre-Partition debt (approx)’. It may be mentioned here that while introducing the Budget for 1948-49 on February 28, 1948, R.K. Shanmukham Chetty, the then Minister for Finance, had put the rate of interest at around three per cent for the Rs 300-crore debt.
“Pakistan’s total debt is to be repaid in Indian rupees in fifty annual equated instalments for principal and interest. As a measure of assistance to the new Dominion in its earlier years it has been agreed that the first repayment should commence only in 1952,” he had said.
Introducing the Budget for 1953-54 on February 27, 1953, C.D. Deshmukh, the then Finance Minister, said: “In the Budget credit had been taken for a recovery of Rs 9 crore from Pakistan as the first instalment of its debt repayment to India but as it has not yet been possible to reach an agreement on the provisional amount of the Partition debt, this payment is likely to be carried forward to the Budget year.”
While presenting the Budget next year on February 27, 1954, Deshmukh said that he had taken credit for a recovery of Rs 18 crore from Pakistan on account of two instalments due from that country in repayment of the Partition debt.
In the Budget presented on February 28, 1955, he said: “The credit of Rs 9 crore which I had taken in the Budget from repayment of Partition debt by Pakistan has, however, not materialised so far, as, contrary to the hope which I had expressed in my Budget Speech last year, it has not yet been possible, for a variety of reasons, to reach a settlement with Pakistan over the outstanding financial issues between the two countries.”
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