Despite reeling under outstanding debt of Rs 1.95 lakh crore, Amarinder Singh government will spend nearly Rs 12,000 crore next fiscal to keep its poll promises for farm debt waiver, free power to farmers and subsidised power supply to industry at the rate of Rs 5 per unit.
Presenting the Congress government’s budget for the year 2018-19 on Saturday, Finance Minister Manpreet Singh Badal allocated Rs 4,250 crore for the debt relief scheme, Rs 6,256 crore for continuing free power to farmers and Rs 1440 crore to provide power at a variable cost of Rs 5 per unit to Industry even as domestic users pay more for the same.
This is despite the fact that the state will spend much lesser on several key areas — Rs 1,634 crore on monthly pension of Rs 750 per month to 17.35 lakh beneficiaries, Rs 3020 crore on rural development and panchayats and Rs 4015 crore on primary and secondary health care. The allocation for social security sector stood at Rs 3806 crore.
The total Budget size for the year 2018-19 is Rs 1,29,698 crore. However the effective Budget size is Rs 1,02,198 crore as the above figure contains a budget provision of Rs 27,500 Crore towards “Ways and Means” transactions for the current year.
The total Receipts are expected to be Rs 1,22,923 crore. As per the budget, the total outstanding debt of the Punjab as on 31 March. 2018 is Rs 195978 crore which is 41.04 per cent of gross state domestic product (GSDP) for 2017-18. The state’s outstanding debt is likely to be Rs 2,11,523 crore in 2018-19 which is 40.82 per cent of GSDP.
The debt servicing (principal and interest) for 2018-19 is a whopping Rs 24,870 crore as against the allowed net borrowing limit of Rs 15545 crore approved by the Union government for financial year 2018-19. “This leaves absolutely no room for the state to invest the borrowed money into development and build resource generating Capital assets. The only way left for this government is to mobilise more revenue while at the same time cutting down on our non-committed expenditure,” the finance minister said.
The budget proposed raising Rs 1500 crore through Additional Resource Mobilisation (ARM) measures. These include a legislation for imposing a development tax of Rs 200 per month on the income tax payees in the state.
Badal said many of the progressive states like Maharashtra, Gujarat, Karnataka, AP and Tamil Nadu have been collecting such tax for development for a long time.
The state also intends to bring a new Social Security Legislation to create a dedicated fund to meet its commitment towards the weaker sections of society.
On a positive note, Badal said as a result of fiscal prudence exercised in the last one year, the state reduce the number of days for which the treasury remained in overdraft from 179 days in 2016-17 to 98 days in 2017-18.
Thereby reducing the interest liability on this count only on the State by about Rs 5 crore. “The state had remained in double overdraft for 29 days in 2016-17, we hope to close 2017-18 without going into double overdraft even for a single day,” the minister added.
“However, this still leaves an unfunded resource gap of Rs 4175 crore. I hope that with improve efficiency in tax compliance and administration and efficient delivery of public services, we would be able to economise on the expenditure and thus close this gap which is visible as of now,” he added.