Even after 73 years of partition, India is religiously carrying forward the Rs 300 crore pre-partition day debt of Pakistan on its books. The Economic Survey calls it "Amount due from Pakistan on account of share of pre-partition debt". According to the survey, India has net liabilities of Rs 1,09,84,736 crore, including the meager Rs 300 crore from Pakistan.
According to earlier media reports, the Indian government states the same amount as a pre-partition debt in its budgets since the country became a republic. In 1950-51, this Rs 300 crore accounted for more than 10 per cent of India's total liabilities of Rs 2,865 crore and nearly 10 times of India's total external debt of Rs 32 crore. The first union budget of India presented by the finance minister RK Shanmukham Chetty in 1947 had earmarked Rs 197.39 crore as expenditure.
It is interesting to note that the bitterness of partition is still high on the books as that the governments, which ruled India since 1947, never tried to write-off or consider it as a non-performing asset (NPA). Surprisingly, the government has not added interest to this amount or adjusted it against inflation and exchange rate revision.
This liability has counter-liability on the books of Pakistan. The media reported in 2014 that the State (Central) Bank of Pakistan (SBP) recorded in its quarterly report that India still owes it a little over Rs 560 crore-- mainly on account of assets held with the RBI pending transfer to Pakistan. The original, unsettled claim from Pakistan was Rs 49.8 crore, but it swelled to over Rs 560 crore after adjusting for inflation and exchange rate revisions.
According to historical records, the Reserve Bank of India (RBI) had served as the central bank for Pakistan in its formative months-- until December 1947. The RBI overlooked the division of assets, including liquid assets in currency chests.
When the Indian government decided to stop the transfer of the final tranche of Rs 55 crore to Pakistan post-partition, as the neighbouring state-supported civil trouble in Kashmir, Mahatma Gandhi stood for settlement of financial liabilities.
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