Finance Minister Manpreet Singh Badal will not be focusing on just a statement of finances as he presents the maiden Budget of the Capt Amarinder Singh government in the Vidhan Sabha on Tuesday. His proposals — in line with the promises made by the Congress in its election manifesto — will tread a fine line between setting aside funds for the government’s development agenda and bringing in fiscal consolidation.
With the hopes of Punjabis high from the Budget proposals, Manpreet admits that the task assigned to him is onerous, but he hopes to meet the expectations of the people who elected the Congress with an overwhelming majority. “This Budget will be a vision document. It will outline exactly how we propose to run the affairs of the state. The focus will be on development of human resources and bettering the lives of the people of Punjab by touching all vulnerable sections of society,” Manpreet told The Tribune on the eve of presenting the Budget.
So one can expect setting aside of Rs 2,000 crore for the much-awaited debt relief for farmers and doubling of the social security allocations, introduction of free distribution of sugar and tea leaves, dovetailing of several central schemes to present a roadmap for dealing with unemployment and try and resurrect the state’s industry with some incentives among other things. Almost all welfare measures, promised by the Congress before the elections, will be rolled out, but the promised total amount of the welfare measures will be hiked gradually over the next five years.
What Manpreet will have to deal with over the next five years is the burgeoning debt burden (amounting to Rs 2 lakh crore) and over 90 per cent of the state’s total revenue receipts going into meeting the state’s committed liabilities.
The salary bill is expected to go up to Rs 25,000 crore (from Rs 19,585 crore last fiscal). The pension bill will also increase to Rs 9,000 crore (up from Rs 7,767.65 crore in 2016-17), while the power subsidy to the farm sector is expected to increase to Rs 10,000 crore (up from Rs 5,400 crore last fiscal).
In addition, the state will be requiring Rs 18,000 crore for the servicing of its debt alone. Sources in the Finance Department say of this amount, Rs 4,000 crore goes as the repayment of principal amount and Rs 12,000 as interest payment. While the state will pay Rs 18,000 crore for servicing its debt, it has already reached its maximum limit of raising Rs 12,819 crore through external borrowings. In simple terms, the state will be spending Rs 5,200 crore more than it can raise only on debt servicing. The servicing of debt will be eating into the state’s tax revenues.
The latest unaudited figures for 2016-17 show that the state’s total receipts were Rs 63,612 crore. In spite of this, the state’s fiscal deficit has increased to Rs 18,104.97 crore against the target of Rs 13,087 crore. The revenue deficit for the last fiscal is Rs 6,610.71 crore.
With the Goods and Services Tax rollout scheduled from July 1, the state’s taxes worth almost Rs 2,800 crore will be subsumed. Though the state expects its revolutions to increase by Rs 2,400 crore, this year may not be a smooth ride even as Manpreet will be pushing for better tax realisation. But next year, as the central devolution increases by 14 per cent, the state will get more legroom to rollout its agenda.
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Via The Tribune