Budget Additional resources needed to fulfill poll promises and Rs 14,000-cr annual plan is Rs 2,000 cr,austerity to fetch only Rs 250 crore
While presenting his maiden Budget on Wednesday,Punjab Finance Minister Parminder Singh Dhindsa achieved a rare feat of being lavish and austere at the same time. The first Budget of the Parkash Singh Badal government on retaining power,came with promise of delivering a few of the many poll promises with austerity cuts. So it is more useful tablets instead of laptops that too,only for 1.5 lakh Class XII students employability allowance for graduates registered for at least three years at employment exchanges (nearly 30,000 youth) and Wi-fi connectivity in all government senior secondary schools,instead of data cards.
The other poll promises of the ruling Akali Dal that the Budget has provisioned for are scholarships for sportspersons,four new stadiums,free coaching for SC/BC students of poor families and Rs 20 crore for four more memorials. In a new initiative,the Budget announced Rs 30 crore for families hit by farmer suicides identified by the three state universities studying it. Each such family will be provided Rs 2 lakh.
But to fulfill them,Dhindsa proposed no new taxes. Instead,he announced a complete ban on purchase of new vehicles,renovation and furnishing of government offices and leave travel concession of employees for one year except for those retiring this year. He also imposed a 10 per cent cut on four counts fuel,maintenance and repair expenses of government vehicles,allowances of ministers and chief parliamentary secretaries,electricity and telephone bills of government offices and other office expenses.
Interestingly,Dhindsa said the austerity measures will yield Rs 250 crore,while he pegged the additional resources required to fulfill these poll promises and the Rs 14,000-crore annual plan at Rs 2,000 crore. Pleading austerity,the Budget has no mention of high-cost poll sops such as free five marla houses for landless poor,free gas connections for 9.75 lakh BPL families,provident fund to farmers and wheat at Rupee 1 per kg to the nearly 15 lakh families under its populist atta-dal scheme,which the FM said will be honoured in the coming budgets.
Though his Budget only spoke of improving tax administration and compliance,Dhindsa,while addressing the media later,said he is not ruling out new taxes. I never said it is a tax-free budget. If we have to meet a gap of Rs 2000 crore,we will have to bring in new taxes. However,a decision in this regard will only be taken by the cabinet after consulting the alliance partners, he added.
For a state that is seeking a bailout from the Centre,the Budget also outlined the signs of worry. The actual revenue deficit for 2011-12 has shot up to Rs 6,838 crore against Rs 3,379 crore in the Budget estimates,the FM said. The slippage in the target is mainly on account of no additional resource mobilisation measures and increase in salary and pensions, he added. The minister further said the committed expenditure on account of salaries,pensions,interest payments and power subsidy is likely to be Rs 30,560 crore in 2012-13 amounting to 80.44 per cent of the revenue receipts of the year.
The level of debt is also not sustainable. The gross borrowings for 2012-13 will be Rs 13,204 crore,which will mainly go into repaying the principal amount and interest,leaving only Rs 2,936 crore in the hands of the state. More than 80 per cent of the net borrowings are going into meeting revenue deficit,leaving only 20 per cent for capital expenditure. The interest payments as percentage of revenue receipts have increased to 23.5 per cent in 2011-12 this is one of the highest for any state in the country, Dhindsa said.
But he claimed this Budget will put Punjab back on the fiscal roadmap set by the 13th Finance Commission in 2012-13 in terms of all three indicators revenue,fiscal deficit and debt to GSDP ratio. If we fail to meet the targets,we will lose Rs 500 crore every year, he added.