Driving Naari Programme launched in Chandigarh
Chandigarh, The correction in revenue receipts for the ongoing financial year, as revealed in Budget proposals presented by Punjab Finance Minister Parminder Singh Dhindsa, presents a rather dismal picture for resuscitating the state’s fiscal health during the next year as well.
Though Deputy CM Sukhbir Badal maintains the state’s economy was on an upswing, with the state’s “robust revenue growth since 2007”, the Budget proposals speak otherwise. The revenue receipts this year are 5% lesser than the estimates while expenditure has exceeded by 2%. This means the earnings are declining whereas expenses have been rising.
Sukhbir, during an interaction with mediapersons last night, had maintained that the state’s own tax revenue (as percentage of Gross State Domestic Product) was 8.94%. He said Punjab ranked fourth on this parameter. “This shows Punjab’s performance is good. The debt burden has risen but vis-à-vis the GSDP percentage, it is well within the limits prescribed by the 13th Finance Commission. The debt that Punjab is taking is productive debt, which is essential for growth,” he said.
He said in the coming financial year, they had set “realistic” growth targets of 8.17% for revenue receipts and 5.8% for expenditure.
But the Budget documents reveal that considering the debt of Rs1.24 lakh crore by March 2016, Rs3,600 crore would go only towards repayment of debt and Rs9,900.14 crore towards interest payment. If we agree that the state’s total revenue growth would be robust and yield the estimated revenue receipts of Rs46,229.24 crore, 29.19% of the total earnings would go towards debt-servicing. About 55% of the earnings would go towards salaries and pensions (Rs25,536 crore) and 13% (about Rs6,200 crore) for subsidies. By this calculation, only 3% of the revenue would be left for development. No wonder the state will have to borrow heavily again this year, almost Rs12,050 crore, to carry on with development.
Sukhbir admitted that salaries and pensions were a big drain on the resources. He said the reason why the state has had to dilute VAT on different products was to bring in uniformity in regional taxation structure. “Considering that we expect higher central devolution and growth in excise and electricity duty, the economy will be improving. Since the debt is mostly for creating infrastructure, it will help in ushering a new era of growth,” he said.
