Past imperfect, future perfect. Yet another Punjab budget adheres to the same philosophy as between budget and revised estimates, a lot changes for the state’s fiscal health. The sub-text of Punjab finance minister Parminder Singh Dhindsa’s fourth budget remains the same — mounting bills of debt, subsidies and populist schemes, no mobilisation of resources resulting in below-par development expenditure on social services or economic services.
Decoding his budget, Dhindsa was at pains to term it as “realistic”. The FM’s predicament arises out of the comptroller and auditor general of India reports of recent years having pointed out that the state’s revenue projections were inflated and expenditure under-reported.
As he once again made tightrope walk between catering to vote-bank politics and compulsions of alliance government while keeping fiscal indicators under leash has once again made the budget look where revised and budget estimates may tell an entirely different story.
Sample this: While Dhindsa has claimed he had kept the revenue targets conservative in his 2015-16 budget as the growth in the value added tax (VAT) could not be achieved, the budget has pegged the revised estimates for VAT at Rs 1,7760 crore, same as the budget estimates thereby showing that the target was met.
His revenue deficit target in the 2014-15 was Rs 4,252 crore, a drastic fall from Rs 6,537 crore in the preceding year. But in the revised estimates for 2014-15, the deficit had overshot to Rs 6,240 crore. Despite showing a higher outlay on power subsidy, salaries, pensions and interest payments on loans, the budget pegs the revenue deficit at Rs 6,393 crore. With no resource mobilisation announced, Dhindsa has also not demystified how he aims to achieve this feat. Dhindsa said the power subsidy was expected to be Rs 5,484 crore. But the list of state’s revenue expenditure pegs it at a modest Rs 2,504 crore in last year’s revised estimates and Rs 2,984 crore for 2015-16. The revised estimates of last year for capital expenditure and grants-in-aid from the Centre are also different from last year’s estimates.
The ways and means advances of the state touched Rs 18,500 crore in revised estimates. The budget size of last year had pegged it at Rs 15,000 crore, a calculation that bloated the size of the budget.
Dhindsa also did not dwell on how debt was becoming unsustainable in absolute terms as Punjab’s market loans were set to jump to Rs 12,050 crore. He spoke of keeping deficits and debt under parameters of fiscal roadmap in terms of percentage of gross state domestic product (GSDP). But the GSDP growth itself has been shown to grow at 10.14%.
AMBIGUITY ON CENTRAL SCHEMES
Dhindsa, who had earlier dubbed higher devolution as “zero sum” for Punjab owing to decline in grants centrally-sponsored schemes, has reflected the fall in Central grants to Rs 733 crore. During his press conference, Dhindsa said there was no clarity on how the sharing criteria had changed between the Centre and states on schemes. Punjab’s calculations may go awry once the Centre says which schemes go under the axe and which it funds from its kitty. firstname.lastname@example.org