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Thursday, April 09, 2020

Fund-crunched Punjab’s fiscal liability: Over 3.5 times its revenue receipts

The CAG has stated that during the year 2017-18, after the Congress took over, the revenue deficit increased by 29 per cent as compared to the previous year (2016-17) when SAD-BJP was in power.

By: Express News Service | Chandigarh | Published: February 28, 2020 1:21:25 pm
Fund-crunched Punjab’s fiscal liability: Over 3.5 times its revenue receipts The state Budget will be presented by Finance Minister Manpreet Singh Badal today.

Fund-crunched Punjab has a fiscal liability of Rs 3.68 against every rupee earned in the form of revenue receipts. This was revealed after CAG reports were tabled in the Budget Session of Punjab Vidhan Sabha on Thursday.

The CAG, while auditing state’s finances for the fiscal year 2017-18 — the incumbent Congress government’s first fiscal year in the state, has stated : “Punjab’s fiscal liabilities (in 2017-18) were 368.14 per cent of its revenue receipts. Overall fiscal liabilities of the state were Rs 1,95,152 crore as on March 31, 2018. Fiscal liabilities were 41.41 per cent of GSDP and 368.14 per cent of the revenue receipts.”

The CAG has stated that during the year 2017-18, after the Congress took over, the revenue deficit increased by 29 per cent as compared to the previous year (2016-17) when SAD-BJP was in power.

In another downturn, the net public account receipts also recorded an increasing trend during 2013-17, as it increased from Rs 2,145 crore in 2013-14 to Rs 7,553 crore in 2016-17, but decreased to Rs 1,757 crore during 2017-18. However, the total receipts increased by 51.35 per cent, from Rs 48,470 crore in 2013-14 to Rs 73,357 crore in 2017-18.

During the period 2013-14 to 2017-18, revenue receipts and capital receipts increased from Rs 35,104 crore and Rs 11,221 crore to Rs 53,010 crore and Rs 18,590 crore, respectively.The revenue expenditure increased by Rs 7,169 crore (12.96 per cent) during the 2017-18 over the previous year.

The capital expenditure, money spent on development, decreased by Rs 1,994 crore (45.88 per cent) over the SAD-BJP’s last fiscal year. The capital expenditure during the 2017-18 was less by Rs 3,805 crore than the projections made in the budget, which indicates that asset creation was not given as much priority as intended in the budget estimates. The government had stopped most of the development projects during its first year as SAD-BJP was accused of spending money in the election year.

State’s spending on social sector, as proportion of aggregate expenditure, declined from 27.83 per cent in 2013-14 to 24.99 per cent in 2017-18. Disbursement of loans and advances decreased by Rs 40,604 crore (98.16 per cent) during the 2017-18 compared to the the previous year.

Incomplete projects

As many as 40 projects, scheduled for completion between 2008-09 and 2017-18 were incomplete. The expenditure of Rs 771.52 crore incurred on these incomplete projects was yet to yield the intended benefits and the nine major irrigation projects caused the state government to suffer a net loss of Rs 351.64 crore during 2017-18.

Disaster management fund

In a rap on the knuckles of the state, the CAG has stated that it had not invested funds worth Rs 5,382.21 crore towards State Disaster Response Fund (SDRF). An amount of Rs 833.13 crore under Building and Other Construction Workers Welfare Cess was lying unspent.

Revenue deficit upswings

The revenue deficit increased to Rs 9,455 crore from Rs 6,537 crore in the year 2013-14. A steep decrease of Rs 34,577 crore was recorded in fiscal deficit. However, there was primary surplus of Rs 2,840 crore.

Budgetary process not sound

The state government’s budgetary process has not been sound during the year and there were savings under several grants, the CAG has said.

These grants should have been spent. During 2017-18, expenditure of Rs 1,01,117.64 crore was incurred against total budget provision of Rs 1,19,884.67 crore resulting in net savings of Rs 18,767.03 crore. An amount of Rs 3,938.70 crore (93.76 per cent) was surrendered on the last day of the year. Excess expenditure of Rs 40,609.66 crore incurred during 2011-18 required regularization. Expenditure of Rs 3,199.43 crore was incurred without making budget provision.

There was rush of expenditure towards the end of financial year. In nine cases, more than 44 per cent of budget provisions was utilised in last month of the year.

Coal washing transport

The CAG has also held Punjab State Power Corporation Limited (PSPCL) responsible for paying “avoidable” energy charges of Rs 961.71 crore on account of transportation of unwashed coal.

Improper storage of wheat

Improper storage of wheat caused a loss of whopping Rs 607.57 crore to the state exchequer from 2017 to 2018. The CAG has stated that improper storage conditions, poor preservation of stocks, storage of fresh wheat with infested wheat resulted in loss of Rs 607.57 crore. The delay in disposal of damaged wheat burdened the state with Rs 8.57 crore more on rent and security.

Export body favours allottee

The Punjab Small Industries and Export Corporation Limited did not charge additional 10 per cent of the price for corner plots causing a loss of Rs 3.28 crore. It extended favour to an allottee in the form of non-recovery of extension fee, change of land use charges and under fixation of ground rent amounting to Rs 18.16 crore besides incurring interest loss of Rs 8.26 crore.

Full pay

The Technical Education and Industrial Training Department allowed full pay and allowances to newly recruited faculty of the Maharaja Ranjit Singh Punjab Technical University, Bathinda instead of minimum of pay band in violation of the notification of Finance Department resulting in inadmissible payment of Rs 2.42 crore.

Rap for amphibious bus

Former Deputy Chief Minister Sukhbir Singh Badal’s dream project of having a controversial amphibious bus in Harike wetlands cost the state Rs 8.63 crore. The CAG in its report has stated that the project been rendered unfruitful as the bus operated for 10 days only and ended up creating a liability on account of cost of operations.

CLU charges lapse

Imprudent decision of the Chief Town Planner not to allow the developer to deposit Change of Land Use (CLU) charges in December 2015 coupled with undue extensions beyond permissible limits led to loss of Rs 3.04 crore to the state exchequer and Rs 16.11 crore to GMADA.

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