Cash crunch grounds new aircraft for Badals,for now

Under attack from the opposition Congress for mortgaging government properties to meet its staggering debt bill,cash-strapped Punjab government has grounded the new aircraft for ferrying the ruling Badals,for now

3 min readChandigarhApr 8, 2014 04:18 PM IST First published on: Aug 29, 2013 at 04:22 AM IST

Under attack from the opposition Congress for mortgaging government properties to meet its staggering debt bill,cash-strapped Punjab government has grounded the new aircraft for ferrying the ruling Badals,for now.

Earlier this year,Punjab had purchased a Bell 429 helicopter for the use of Chief Minister Parkash Singh Badal and his deputy,Sukhbir Badal,for Rs 38 crore. In June,the cabinet sub-committee on civil aviation had given its go-ahead for the purchase of an eight-seater fixed-wing aircraft costing Rs 70 crore.

The Punjab Finance Minister Parminder Singh Dhindsa,who in his March budget announced a 10 per cent austerity cut on purchase of new government vehicles,office expenses,fuel and travel bills,said the proposal of new aircraft has been shelved for now. “A decision was taken to buy an aircraft but it has not been purchased. Our austerity measures also apply to the CM and Deputy CM. Purchase of new vehicles,office expenses,fuel and travel bills roughly amount to Rs 2000 crore annually. A 10 per cent cut,as announced in the budget,would help us meet the target of saving Rs 200 crore,” he said. The new aircraft was to replace the C-19 King Air that was involved in a crash in 2008.

Dhindsa,however,argues that buying is better economics in the long run than hiring. Citing the example of the Bell helicopter,he says hiring a helicopter cost the treasury Rs 1.40 lakh an hour.

Punjab Congress chief Partap Singh Bajwa has questioned why Sukhbir’s daily trips to Delhi were being footed by the state. “He is a businessman and travels to Delhi to look after his business interests. Why should Punjab’s taxpayers pay for his visits?” he asks.

Dhindsa blames Punjab’s committed liabilities for the cash crunch. Since April,Punjab has paid Rs 4,600 crore towards debt servicing. Even though finances were not good in the recent years,Punjab announced a handsome hike for its employees after the Pay Commission report. The state has cleared Rs 2000 crore power subsidy dues in the last three months. While this alone adds up to Rs 6000 crore,the monthly salary and pension bill is a hefty Rs 1,600 crore.

Unable to meet its revenue expenditure,the state has once again squeezed its capital expenditure. So far,just Rs 600 crore has been spent on capital expenditure. Dhindsa denies that projections on revenue in his March budget were over-optimistic. “When the country’s economy is growing below five per cent,the states cannot be blamed,” he adds.

With the state deficits most likely to overshoot the targets,Punjab is hoping all talk on fiscal doom to help it negotiate a better deal with the 14th Finace Commission which is visiting next month to bail it out.