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‘Punjab suffering financial loss’: CM seeks Centre nod to allow sale of liquor in state

Amarinder has written to Union Home Minister Amit Shah seeking a go-ahead, with the condition of social distancing, as the state’s revenue had sharply dipped amid the COVID-19 crisis and a curfew that would continue till May 3.

Written by Kanchan Vasdev | Chandigarh |
April 22, 2020 12:30:50 am
Ministers are learnt to have discussed that while liquor was being sold in black clandestinely by several liquor retailers, the government was suffering losses on account of excise collection. (Representational Image)

A DAY after the Centre pulled up the Punjab government for diluting the COVID-19 lockdown by opening bookshops and AC/cooler outlets, Punjab Chief Minister Capt Amarinder Singh on Tuesday sought permission from the Centre to open the liquor vends in the state at a time when it was suffering major financial loss. Amarinder has written to Union Home Minister Amit Shah seeking a go-ahead, with the condition of social distancing, as the state’s revenue had sharply dipped amid the COVID-19 crisis and a curfew that would continue till May 3. The issue was raised by a few Cabinet ministers at the Cabinet sub-committee meet on finances chaired by the CM through video-conferencing. Ministers are learnt to have discussed that while liquor was being sold in black clandestinely by several liquor retailers, the government was suffering losses on account of excise collection.

“We told the CM that we should open the vends. We should ensure social distancing. Those people who are addicted to liquor have somehow managed to purchase it. Do you think they had stocks that could last a month? Then why should the government suffer financial loss? We can always follow social distancing. Queues should be marked outside the vends and buyers should be made to follow rules,” a minister told The Indian Express. Punjab has suffered losses to the tune of Rs 5,000 crore during the lockdown period. Finance Minister Manpreet Singh Badal has said that during the current fiscal year, Punjab’s deficit would be to the tune of Rs 22,000 crore. Every month, the state’s estimates of excise duty turn out to be over Rs 550 crore on sale of liquor. But due to the lockdown, the vends have been shut. “Our distilleries are functioning. There is labour inside. They are manufacturing sanitisers. The sanitisers are being supplied through transport. Then why can’t liquor be supplied too?” asked a minister. The CM, in his letter to Shah, has sought for sale of liquor to be allowed in a phased manner to mop up VAT and excise revenue. “The Ministry of Home, GoI, should allow the state to take a conscious decision to allow the sale of liquor in certain areas in a phased manner with strict social distancing and other measures to prevent COVID-19,” he said.

Capt seeks Rs 7,400-cr from Centre Pointing to an alarming resource gap between the state’s anticipated receipt and committed expenditure, the CM on Tuesday also sought interim compensation to the tune of Rs 3,000 crore for the month of April on account of the COVID-19 pandemic.

In his letter to Shah, he also asked for expediting the release of the state’s GST arrears of Rs 4400 crore for the last four months, to help the state overcome its resource constraint.

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Amarinder said the Centre should compensate Punjab for its loss of revenue due to COVID-19. While the Rs 3,000 crore for April was an estimate, he said “detailed assessment of loss and requirement of funds for relief and rehabilitation will be submitted in due course”.

However, he stressed, “The Government of India should provide interim assistance so that the fight against COVID-19 is not allowed to weaken in any way.” Punjab, Amarinder said, was facing a huge strain on state exchequer on account of the required health and relief measures that are being continuously scaled up, “with hardly any revenue receipts accruing to the state during these days due to near complete shutdown of trade, business and industry”. The state government had made a provision of revenue receipts of Rs 3360 crore for April in the State Budget 2020-21. These included: GST- Rs 1322 crore; VAT on petroleum products – Rs 465 crore; state excise revenue – Rs 521 crore, motor vehicle tax – Rs 198 crore; electricity duty – Rs 243 crore, stamp duty – Rs 219 crore, and non-tax revenue – Rs 392 crore.

However, Amarinder observed that these receipts are expected to decline sharply as most economic activities in the state remain closed on account of the lockdown. The receipts on account of SGST, IGST, VAT, excise, stamp duty and motor vehicle taxes are almost negligible and the reduced electricity consumption has resulted in a drop of 60 per cent of the expected revenue from electricity duty during April 2020, he said. In addition, said the chief minister, the GST compensation of approximately Rs 4,400 crore for the last four months — from December, 2019 to March, 2020 — was also pending for disbursement by the Union government. On the other hand, he pointed out that the committed expenditure of the state i.e., debt servicing, pensions, salaries, relief measures for COVID-19, health care and infrastructure etc., is budgeted at Rs 7,301 crore for the month of April 2020, resulting in a huge resource gap between the anticipated receipts and committed expenditure. This, he said, would help the state immensely in its efforts to scale up the relief and healthcare measures and meet some, if not all, of its committed liabilities and other day-to-day expenses. The chief minister assured the home minister of the state’s full and continued support in the efforts of the Centre to overcome the present crisis.

Seeks 3-month special financial package

In a letter to Prime Minister Narendra Modi, Amarinder suggested a three-pronged strategy to bail out the states from the COVID-19 crisis, including a 3-month special financial package and extension to the 15th Finance Commission till October 2021 for submission of its final report.

He the PM to ask the 15th Finance Commission to review its interim report for 2020-21 in the context of the much lower revenue share for the states compared with what was expected from the earlier projections which assumed 7 per cent growth of GDP. Noting that a zero growth scenario in GDP for India was not unlikely, he said that some analysts were projecting even negative growth. Given the likelihood of very low growth, which was expected to cause the revenue shortfall to last for the whole year, the CM requested Modi to direct the 15th Finance Commission to defer the submission of its full report to October, 2021, when they will be better able to make a realistic assessment of the likely growth of the economy over the next five years.

“Nothing would be worse than getting committed to a five year revenue sharing projection based on unrealistically high growth projections,” he warned, suggesting that the Finance Commission could make another interim report for 2021-22. “With the states continuing to shoulder their committed liabilities and facing new demands on relief, health infrastructure expenditure etc, it is only fair and just that the 15 Finance Commission should be requested to recommend a Special Covid-19 Revenue Grant for the year 2020-21,” Amarinder further said. In his letter, the Chief Minister sought an immediate 3-month special financial assistance package to enables states to handle the additional health related expenditure and basic relief expenditure, and suggested that the package should give the states maximum flexibility to design, implement and execute it in a manner that is customised to local problems and needs. The immediate 3-month package may be adjusted against the Special Covid-19 Revenue Grant, as proposed, he said.

State allows staff from private hospitals to be deputed in govt hospitals Punjab Chief Secretary Karan Avtar Singh on Tuesday directed the departments of health and family welfare and medical education and research to depute staff of any public and private authority or body in government hospitals and medical colleges.

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