‘Tax revenue biggest concern… it has not grown as expected’

Punjab’s Finance Minister Parminder Singh Dhindsa speaks on state’s fiscal health, static tax revenue, fat salaries bill, liabilities and outstanding bills before tabling of the budget.

Written by: Kanchan Vasdev, Navjeevan Gopal

4 min readLudhianaMar 14, 2016 10:21 AM IST

Punjab’s Finance Minister Parminder Singh Dhindsa speaks on state’s fiscal health, static tax revenue, fat salaries bill, liabilities and outstanding bills before tabling of the budget. Express photo

As you are ready with the annual budget, how do you see state’s fiscal health?

We have successfully improved our fiscal situation. We have managed our fiscal deficit within the recommended limit of 3 per cent as per the fiscal consolidation roadmap laid out by the 13th Finance Commission. We have achieved this target with 2.97 per cent deficit. Similarly, the state’s debt should be less than 38.7 per cent of the GSDP in 2014-15 and though the debt now stands at Rs 1.24 lakh crore, it is 32.27 per cent of the GSDP. Next year, the debt will be 31.34 per cent of the GSDP.

How many times did the state go in overdraft this fiscal?

I do not remember it off hand. But it was much lesser times compared to last.

What is your biggest concern?

The tax revenue. It has not grown as it should have. This affects the cash flow. Otherwise, the situation is stable. Coming year would be better.

Are you planning to introduce any new taxes?

Next year’s budget proposal is a secret document. It is the privilege of the Assembly to learn about any new proposals before anyone else.

Who is to be blamed for the static tax revenue?

Story continues below this ad

The global economic slowdown. collections on account of stamp duty on registration of property have come down from Rs 3,000 crore to Rs 1,500 crore due to slump in real estate market. Also, the revenue generated through registration of new vehicles has also come down as lesser new vehicles were purchased by people in the state.

What about poor growth of VAT?

The minuscule growth in VAT collections is not unique to Punjab. It is a pan India phenomenon. I have had discussions with finance ministers of states like Maharashtra, Chhattisgarh and Gujarat and similar trend exists in those states as well. The silver lining is that we have not recorded a negative growth in VAT.

You present a rosy picture about the fiscal health. Why are state’s properties being mortgaged?

Not a single property was mortgaged this year. Two years ago, PUDA mortgaged properties to generate funds. We have already returned half of the loans generated against these.

What about the pending bills?

Story continues below this ad

We have pending bills worth Rs 2,000 crore. But considering that we have already paid bills worth Rs 40,000 crore this year, an amount of Rs 2,000 crore is minuscule. Each year, during March, we are in a capacity of clearing bills worth Rs 4-5,000 crore. Hence, these bills would be cleared as we come to a close. Last year, we had unexpected expenditures including sugar subsidy and Rs 300 crore worth compensation to farmers.

You have always frowned upon the fat salaries bill. What burns a hole in the state’s pocket?
We have a fat salaries bill amounting to Rs 28,000 crore. It is a cause for concern for us. The bill has been growing by 10-15 per cent every year in the last five years. The implementation of pay commission reports, arrears and installments of DA really burn a hole in our pocket.

Kanchan Vasdev

Kanchan Vasdev is a Senior Assistant Editor in The Indian Express’ Punjab bureau. She is a highly experienced journalist with 22 years of expertise covering high-stakes politics, governance, and social issues in Northern India. Professional Background Role: Primary reporter covering the Punjab Chief Minister’s Office (CMO), government policies, and the Aam Aadmi Party (AAP) leadership in the state. Experience: She previously worked with The Tribune and has played a key role in launching various city editions. Special Projects: Abandoned Brides: Authored a monograph on brides abandoned by NRIs as part of the Prabha Dutt Memorial Fellowship. Environment: Worked as a Centre for Science and Environment (CSE) fellow, focusing on the pollution levels in the Satluj river. Recent Notable Articles (Late 2025) Her recent reporting focuses on the legislative strategies and political maneuvers of the Bhagwant Mann-led Punjab government: 1. Legislative & Governance Standoffs "Punjab govt advances special Assembly session to pass resolution against VB-G RAM G Bill" (Dec 20, 2025): Reporting on the state's move to block the Centre's "Viksit Bharat" mission, which the state claims will undermine MGNREGA. "Punjab govt doubles down on special sessions, sixth in January" (Dec 19, 2025): Detailing the AAP government's use of special sessions as a legislative tool amid tensions with the Governor. "Punjab asks 'VIP teachers' working near Chandigarh to go back to border districts" (Dec 16, 2025): Reporting on CM Mann's move to end the practice of influential teachers avoiding postings in remote areas. 2. Political Analysis & Rural Polls "Punjab rural polls: Why Akalis are likened to dinosaurs in Punjab" (Dec 19, 2025): Analyzing CM Bhagwant Mann's rhetoric against the Shiromani Akali Dal (SAD) following local body elections. "AAP claims win in 78% Punjab zila parishads as counting continues" (Dec 18, 2025): Breaking down the results of the 2025 rural elections. "Rahul Gandhi and Sidhu alike, says Bhagwant Mann" (Dec 13, 2025): Covering the CM's critique of the Congress leadership. 3. Law Enforcement & Bureaucracy "Suspended Punjab IPS officer Ravjot Kaur Grewal awaits reinstatement" (Dec 10, 2025): Investigative reporting on the bureaucratic red tape involving the Election Commission and the state government. "Punjab declines to give parole to Amritpal Singh" (Nov 27, 2025): Detailing the state government's refusal to grant parole to the radical preacher and sitting MP. 4. Welfare & Economy "Punjab government's plan to add more freebies to 'atta-dal' scheme hits funds roadblock" (Dec 4, 2024): An analysis of the fiscal challenges facing the state's flagship food security program. "Mann leads Punjab delegation to Japan and South Korea for investor outreach" (Dec 2, 2025). Signature Beat Kanchan Vasdev is known for her insider access to Punjab's political executive. Her writing provides deep insights into how state policies are formulated and the friction points between the state government and central authorities. Her dual expertise in environment and law allows her to report on complex issues like the "Farmhouse Policy" (Dec 18, 2025) and river pollution with a unique policy-oriented lens. X (Twitter): @kanchan99 ... Read More

Stay updated with the latest - Click here to follow us on Instagram

Tags:
Punjab Finance Minister

Loading Recommendations...

Apr 11: Latest News

Live Blog