Over three months after Punjab CM set up a Group of Experts headed by noted economist Montek Singh Ahluwalia to bring Punjab’s Covid-hit economy back on track, the group’s first set of recommendations has castigated free farm power as a major burden on the state’s economy, while recommending several tough measures across sectors including a temporary pay cut for employees.
The suggestions include giving Central pay scales to state government employees, pushing for an increase in professional tax, increasing excise duty on alcohol, and enhancing income from sand mining.
While claiming that farm power subsidy limits Punjab’s ability to incur other expenditures essential for state’s development, the report notes that the government has already announced that it will not adjust power tariffs.
In view of this stand, the experts’ group says that “government should pursue second best approaches” to reduce the effect of free power.
The expert group further says that given the state’s economic situation “the government should consider deferring the payment of salaries of all categories of employees by varying percentages in line with several other states” to deal with the resources problem.
Pointing out that the road ahead looks tough for Punjab’s finances given the projected shortfall in revenue, the group argues that it must join other states to urge the Centre to make timely payment of GST compensation promised to them.
This is the first report of the group, which was set up in April. The group is expected to submit its final report by December.
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