Chandigarh: Presenting a budget proposal of Rs 1.96 lakh crore for 2023-24, state Finance Minister Harpal Cheema said on Friday that Punjab would borrow an estimated Rs 50,000 crore and depend on another Rs 45,000 crore.
The development could add substantially to Punjab’s already dangerous debt burden.
“Ways and Means” are temporary advances granted by the Reserve Bank of India (RBI) to central and state governments to deal with any mismatch in receipts and payments. However, this is usually an emergency provision used sparingly.
Presenting the first full budget of the Aam Aadmi Party government, Cheema said his government would focus on agriculture, health and education in FY24.
This year’s budgetary allocation is 26 percent higher than last year’s 1.55 lakh crore.
The Gross State Domestic Product (GSDP) for Punjab is estimated to increase by around Rs 7 lakh crore, he said, adding that the revenue deficit is 3.32 per cent and the fiscal deficit is 4.98 per cent.
The budget risk pushes Punjab’s outstanding debt to over Rs 3.47 lakh crore or 46.8 per cent of the state’s GSDP – exceeding the fiscal deficit limit recommended by the 15th Finance Commission.
The state currently has a debt of Rs 3.12 lakh crore.
In its recommendation to the states in February 2021, 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 add to the already dangerous debt burden of Punjab, which it is currently dealing with. 1.09 lakh for each individual in the state.
Budget comes after many days The Comptroller and Auditor General of India (CAG) highlighted the precarious financial position of Punjab – a report on ‘State Finances’ for 2021-22 tabled in the Assembly earlier this week warning That the debt of the state may cross Rs 5 lakh crore by 2031.
Opposition parties have criticized the budget, not only for the burden it will put on state finances but also for the unfulfilled promises of the AAP government.
At the post-budget press conference, LLeader of the Opposition Pratap Singh Bajwa asked the AAP government what happened to the promises made during last year’s assembly elections – such as giving Rs 1,000 per month to every woman in the state and increasing the pension from the current Rs 1,200 to Rs 2,500.
He was not the only opposition leader to misquote the budget – Shiromani Akali Dal (SAD) working president Sukhbir Badal accused the Bhagwant Mann government of perpetrating a “fraud” on Punjabis by fudging the figures. Has been done
“The state’s debt had increased by Rs 42,181 crore to reach Rs 3.47 lakh crore, indicating that Punjab is heading towards financial bankruptcy,” Badal said in a statement. “The fact that the fiscal deficit was pegged at Rs 34,784 crore meant that even the meager resources allocated to various departments and schemes were unlikely to be released.”
Bharatiya Janata Party (BJP) national spokesperson Jaiveer Shergill said that no new way of revenue has been shown in the budget.
“A closer look at the budget shows that it has actually put Punjab in reverse gear, where (Chief Minister) Bhagwant Mann is asleep at the steering wheel,” Shergill said in a statement.
Meanwhile, the government admitted that some of its promises were still unfulfilled and said it was committed to honoring all pending guarantees.
budgetary allocation
Presenting the budget, Finance Minister Cheema said his government would spend Rs 14,000 crore on agriculture this year, which is 20 per cent more than last year.
Cheema said another Rs 17,000 crore – 12 per cent more than last year – would be spent on education and about Rs 5,000 crore would be spent on health, which is 11 per cent more than last year.
police and law and order were allocated 10,000 crore – an increase of 11 per cent over the previous year – while the Department of Social Welfare and Justice received Rs 9,000 crore, a 17 per cent increase over the previous year.
Rs 26,000 crore allocated for infrastructure (13% more than last year).
As per budget estimates, the AAP government’s salary and wages bill is likely to touch Rs 35,000 crore, while pension and other retirement benefits will cost Rs 18,000 crore.
Although the government has not imposed any new tax, it has shown an increase of Rs 5,000 crore in its tax revenue from the last budget.
Addressing the media after the budget, Cheema said that as promised by the government, 90 Percent households in Punjab were getting ‘zero electricity bills’ and the state’s electricity subsidy bill was estimated to exceed Rs 20,000 crore.
Listing other “achievements” of the government, Cheema said 10.5 lakh people availed Mohalla clinic facilities since last year and 27,000 people were given jobs.
Asked how he plans to raise tax revenue Without new taxes, he said the government is expecting better collections from State GST, VAT, State Excise, Stamp and Registration. “We will ensure that no tax leakage is allowed, as was happening earlier.”
In his budget speech, Cheema said that the AAP government is determined to root out corruption.
“Many of those who looted Punjab are already behind bars. The once ubiquitous and powerful mafia, which used to operate with impunity, is nowhere to be seen,” he said.
But opposition leaders Bajwa and Badal asked why the government was yet to deliver the “promised” Rs 20,000 crore from sand mining and the Rs 35,000 crore from taking anti-corruption measures.,
Announcing several sops in their pre-poll campaign last year, Mann and AAP convenor Arvind Kejriwal claimed that these would be paid from the money saved by eliminating mafias and their activities in the state.
Mann had said that by ending illegal mining alone, the government would earn Rs 20,000 crore.
Badal told the media, “The AAP government has earned a meager Rs 135 crore from sand mining, which itself indicates that it has allowed the sand mafia to loot the state exchequer.”
(Edited by Uttara Ramaswamy)