Chandigarh: Punjab will be raising an estimated debt of nearly Rs 50,000 crore and banking on another Rs 45,000 crore through ways and means advances, the state’s Finance Minister Harpal Cheema said Friday as he presented a Budget proposal of Rs 1.96 lakh crore for 2023-24.
The development could increase Punjab’s already alarming debt burden substantially.
The “ways and means” are temporary advances given by the Reserve Bank of India (RBI) to the central and state governments to tide over any mismatch in receipts and payments. However, it’s usually an emergency provision to be used sparingly.
Tabling the Aam Aadmi Party government’s first full Budget, Cheema said his government would focus on agriculture, health, and education in financial year 2024.
This year’s budgetary allocation is 26 per cent more than last year’s Rs 1.55 lakh crore.
The Gross State Domestic Product (GSDP) for Punjab is estimated to grow to nearly Rs 7 lakh crore, he said, pegging the revenue deficit at 3.32 per cent and the fiscal deficit at 4.98 per cent.
The Budget risks pushing Punjab’s outstanding debt to over Rs 3.47 lakh crore, or 46.8 per cent of the state’s GSDP — more than the 15th Finance Commission’s recommended fiscal deficit limit.
The state’s debt burden currently stands at Rs 3.12 lakh crore.
In its recommendation for states in February 2021, the Commission suggested that the fiscal deficit limit should be 4 per cent of GSDP in 2021-22, 3.5 per cent in 2022-23, and 3 per cent between 2023 and 2026.
Such a high fiscal deficit could also push up Punjab’s already alarming debt burden, which currently works out to be Rs 1.09 lakh for each person in the state.
The Budget comes days after the Comptroller and Auditor General of India (CAG) highlighted Punjab’s precarious financial situation — in a report on ‘State Finances’ for 2021-22 tabled in the assembly earlier this week, the CAG warned that the state’s debts could cross Rs 5 lakh crore by 2031.
Opposition parties have criticised the Budget, not only for the burden that it puts on the state’s finances but also for the AAP government’s unfulfilled promises.
At a post-Budget press conference, Leader of the Opposition Partap Singh Bajwa asked the AAP government what happened to the promises it made during last year’s assembly elections — such as giving Rs 1,000 a month to every woman in the state and increasing pension from the current Rs 1,200 to Rs 2,500.
He wasn’t the only opposition leader to have faulted the Budget — Shiromani Akali Dal (SAD) working president Sukhbir Badal accused the Bhagwant Mann government of having played a “fraud” with Punjabis by fudging figures to paint a rosy picture.
“The state debt had increased by Rs 42,181 crore to touch Rs 3.47 lakh crore suggesting that Punjab was hurtling towards financial bankruptcy,” said Badal in a statement. “The very fact the fiscal deficit was pegged at Rs 34,784 crore meant that even the meagre resources allocated for various departments and schemes were not likely to be released.”
Bharatiya Janata Party (BJP) national spokesperson Jaiveer Shergill said the Budget did not show any new avenues of revenue.
“A thorough perusal of the Budget shows that it actually puts Punjab in a reverse gear, with (chief minister) Bhagwant Mann sleeping on the steering wheel,” Shergill said in a statement.
The government, meanwhile, conceded that some of its promises still remained unfulfilled and said that it remained committed to fulfil all pending guarantees.
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Tabling the Budget, Finance Minister Cheema said his government would spend Rs 14,000 crore on agriculture this year — 20 per cent more than last year.
Another Rs 17,000 crore — 12 per cent more than last year — would be spent on education and nearly Rs 5,000 crore would be spent on health, 11 per cent more than last year, Cheema said.
Police and law and order were allocated Rs 10,000 crore — a 11 per cent increase over last year — while the social welfare and justice department got Rs 9,000 crore, which is 17 per cent more than last year.
Infrastructure was allotted Rs 26,000 crore (13 per cent more than last year).
According to the Budget Estimates, the AAP government’s salaries and wages bill is likely to touch Rs 35,000 crore while pensions and other retirement benefits will cost another Rs 18,000 crore.
Although the government has not imposed any new taxes, it has shown an increase of Rs 5,000 crore in its tax revenue from the last Budget.
Addressing the media post-Budget, Cheema said that just as the government had promised, 90 per cent of Punjab’s households were getting ‘zero electricity bills’ and that the state’s power subsidy bill was estimated at over Rs 20,000 crore.
Listing out the government’s other “achievements”, Cheema said that 10.5 lakh people availed of its Mohalla clinic facilities since last year and that 27,000 people were given jobs.
Asked how he plans to increase tax revenue without new levies, he said that the government is expecting improved collections from state GST, VAT, state excise, stamps, and registration. “We will ensure that no tax leakage is allowed like it was happening earlier.”
In his Budget speech, Cheema said the AAP government was committed to rooting out corruption.
“Many of those who looted Punjab are already languishing behind bars. Once omnipresent and powerful mafia, which operated with impunity, is now nowhere to be seen,” he said.
But opposition leaders Bajwa and Badal asked why the government was yet to collect “the promised” Rs 20,000 crore from sand mining and Rs 35,000 crore from taking anti-corruption steps.
Announcing several sops in their pre-poll campaign last year, Mann and AAP convener Arvind Kejriwal claimed that these will be paid for from the money saved by ending mafias and their activities in the state.
Mann had said that the government would earn Rs 20,000 crore from ending illegal mining alone.
“The AAP government has earned a meagre Rs 135 crore from sand mining, which itself indicates it has allowed the sand mafia to loot the exchequer,” Badal told the media.
(Edited by Uttara Ramaswamy)
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