For a state in economic tatters,Punjab has pinned huge hopes on the Union budget to be presented in the Parliament on Thursday to bail it out of its financial mess.
In the pre-budget meeting with Union Finance Minister P Chidambaram held in early January,state Finance Minister Parminder Singh Dhindsa had projected a rather sorry picture of Punjabs economy much in contrast to the claims of the SAD-led government.
Dhindsa has also revived the states claim to the special bailout package envisaged in the 14th Finance Commission for Punjab,Kerala and West Bengal. This is the same bailout package,which led to a political turmoil in the state in 2010,leading to the ouster of former finance minister Manpreet Singh Badal from the SAD. The Union government has constituted a committee under the chairmanship of secretary expenditure (Finance) to explore ways to assist Kerala,Punjab and West Bengal in getting out of their fiscal distress. The committee held three meetings with state government officers. But the committee has not given any report or recommendations to the Centre. Now,the Centre has referred the matter to the 14th Finance Commission, Dhindsa had told Chidambaram.
He had added: The report of 14th Finance Commission will not be available before the end of 2015 and its implementation will start from 2015-16. It is therefore requested that central government may provide a non-plan grant of Rs 5,000 crore in 2013-14 to the state government to tide over its immediate financial problems.
Dhindsa had further said that though Punjab had achieved the targets of fiscal deficit and outstanding debts as recommended by 13th Finance Commission,but due to slowdown in central and state tax revenues and expenditure on arrears of pay commission of government employees and pensioners,the state has not be able to stick to the target of revenue deficit of 1.8 per cent of GSDP for 2011-12 as per its Fiscal Road Map. The target of revenue deficit for current year may also not be achieved, he had added.
Claiming that the states huge revenue deficit was mainly due to rising interest payment,Dhindsa had said: During 2011-12,interest payments were to the extent 23.94 per cent of revenue receipts and during 2012-13,the state will be paying interest of Rs 6,662 crore.
Blaming the states debt burden on the expenditure in tackling militancy,the finance minister had told Chidambaram that Punjab was a revenue surplus state till 1986-87. The state was under Presidential Rule during the prolonged period of militancy. There was no effort on raising revenue and on the other hand,there was a huge liability in respect of expenditure on security and employment related matters. The state had to resort to borrowings,which have been increasing over the years. The Centre waived special term loans of Rs 4,513 crore. This was only a small part of the extra expenditure incurred by the state on security and employment related activities amounting to Rs 13,200 crore, he had added.
Meanwhile,the Punjab budget for 2013-14 will be presented by Dhindsa on March 20. The budget session will commence on March 11,an official spokesman told PTI on Wednesday.