Punjab’s wishlist from Union Budget: funding for crop diversification, additional borrowing, incentive for farmers not setting paddy ablaze
Punjab Finance Minister Harpal Singh Cheema wrote to his Central counterpart Nirmala Sitharaman, listing the state's demands ahead of the Union Budget.
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Diversification could save the Centre approximately Rs 28,000 crore annually by reducing rice procurement costs by Rs 40 per kg, Rs 1,300 crore in fertiliser subsidies, and Rs 1,500 crore annually for the state in power subsidies. (Express File Photo)The Punjab government has put forth several demands for the upcoming Union Budget, which will be presented on February 1. The wishlist includes a special budget for crop diversification, an additional 0.5 percent borrowing allowance for power sector reforms, an annual incentive of Rs 2,000 crore for farmers who do not burn paddy stubble, and reimbursement for the Rural Development Fund (RDF).
In the wishlist submitted to Union Finance Minister Nirmala Sitharaman by Punjab Finance Minister Harpal Singh Cheema, it is stated that if Punjab can achieve diversification from paddy to alternative crops on 10 lakh hectares, it could lead to a reduction of approximately 60 to 70 lakh metric tonnes of rice annually. This shift could result in substantial savings of over Rs 30,000 crore. Diversification could save the Centre approximately Rs 28,000 crore annually by reducing rice procurement costs by Rs 40 per kg, Rs 1,300 crore in fertiliser subsidies, and Rs 1,500 crore annually for the state in power subsidies.
“If even 20 per cent of these savings were allocated towards a comprehensive diversification package, it would likely yield highly successful outcomes. In light of this, the Government of India is requested to allocate a special budget for paddy diversification, which can be matched by the Government of Punjab using the savings accrued from diversification,” Cheema said.
Incentive for farmers for not setting paddy stubble ablaze
The government has also sought Rs 2,000 per acre for crop residue management (CRM). The state has demanded that Rs 2,000 per acre should be given by the Centre while Rs 500 per acre would be paid by the state. “The total cost of this initiative is estimated at Rs 2,000 crore, the Government of India is requested to provide Rs 1,600 crore as budgetary support, while the remaining Rs 400 crore will be borne by the state,” the wishlist stated. Burning paddy stubble is a significant issue in Punjab, contributing to pollution in Delhi.
Additional borrowing
The government has also sought 0.5 per cent additional loan against power sector reforms on the basis of the 15th Finance Commission’s recommendations. Cheema has given the highest priority to the power sector in the expectations that Punjab has from the Centre in the budget. He said he had also written a letter to Sitharaman n December 24 for reforms in the power sector, in which he had said that the criteria for additional loan should be changed.
The wishlist said that the state is eligible for receiving the additional borrowing of 0.5 per cent for power sector reforms for the entire four-year period i.e. financial year 2021-22 to 2024-25. “But it is brought to your kind attention that the Ministry of Finance in its letter dated 09.06.2021 has stated that States will not be able to carry forward the additional borrowing to the subsequent financial years,” Cheema wrote.
Reimbursement of Rural Development Fund
The government has also sought reimbursement of pending Rural Development Fund (RDF), a levy on procurement of grains by the state for the Centre. The Centre has been withholding Rs 8,000 crore towards RDF that it has not paid for last three years.
“The provisional cost sheet does not account for any provision of the RDF. Over the past years, Punjab has repeatedly requested the Union government to include a 3 per cent allocation for RDF in the provisional cost sheets and to release the pending amount of Rs 6,857 crore. The withholding of RDF has significantly affected Punjab’s rural development infrastructure, which comprises 64,878 kilometers of rural link roads and essential market facilities,” the wishlist said.
Grant for police
The state has sought a grant of Rs 1,000 crore for upgrading police infrastructure in border districts, including high-end vehicles and secure police buildings; for constructing new police stations and for installation of electronic surveillance, such as CCTV cameras at border hotspots; for building 30 new police stations, six police lines, residential housing for personnel, and hostels to improve working and living conditions and enhance policing efficiency.
Industrial incentives to support MSMEs of Punjab
Punjab needs to be provided with similar industrial incentives to Jammu and Kashmir and neighbouring states due to its challenges related to proximity to Pakistan and its border and sub-mountainous regions, Cheema stated. The industrialisation in six districts of Punjab, including Amritsar, Ferozepur, Gurdaspur, Pathankot, Fazilka and Tarn Taran, will facilitate not only economic development but also help mitigate brain drain and churn employment opportunities for the local communities, the wishlist stated.
Restoration of NABARD’s ST-SAO Limit to Rs 3,041 crore
National Bank for Agriculture and Rural Development (NABARD) has significantly reduced the limit for short-term seasonal agricultural operations (ST-SAO) from Rs 3,041 crore in FY 2023-24 to Rs1,100 crore for FY 2024-25. Cheema urged the Union government to restore the limit to Rs 3,041 crore to prevent farmers from resorting to moneylenders, in line with the principle of “Sahakar se Samriddhi”.
Vande Bharat trains for Punjab
The state recently secured a Vande Bharat Express train connection between Delhi and Amritsar. Now, it is requesting an additional Vande Bharat train to connect Bathinda, which is the agricultural and commercial hub of Punjab, with Delhi. This new service would provide seamless connectivity for the Malwa region of Punjab.
E-bus services
The government has requested a one-time financial assistance of Rs 300 crore for state transport undertakings to procure 250 new electric buses in the fiscal year 2025-26. This funding will be used for acquiring the e-buses and installing charging points, ensuring the new environmentally friendly public transportation fleet operates seamlessly.
IMC in Rajpura
Punjab has requested Rs 100 crore under the PM Gati Shakti National Master Plan to construct a 5.6-km-long and 45-metre wide approach road connecting NH 44 to the Integrated Manufacturing Cluster (IMC) in Rajpura. This funding is essential for the timely construction of the road and the successful implementation of the industrial cluster, the wishlist stated.
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