The budget projections of Punjab can change drastically not just within a year but also after a month.
The state, which had projected Rs 7,089-crore revenue deficit in its presentation to the Planning Commission for approval of the annual plan in May 2012 presented a budget a month later in June with Rs 3,123 crore as the revenue deficit. Punjab finance minister Parminder Singh Dhindsa, during his speech after presenting the budget, explained the downfall was owing to factoring of Rs 3,100 crore from additional resource mobilisation, double than projected in May; besides, the salary bill was Rs 1,500 crore less in the budget than what was projected to the Planning Commission.
Resources that never came by
The additional resources never came by and the revenue deficit jumped to Rs 7,406 crore in the year 2012-13. The example explains how the Shiromani Akali Dal-led state finance department tides over its budget “blues” with a little help from the bureaucracy. The reason for failing to meet the revenue deficit target was not only that the government failed to generate additional resources but also that the state’s actual revenue receipts were much less and actual revenue expenses much higher.
Jugglery of figures in fiscal roadmap
In the last five years (2010-11 to 2014-15), the actual revenue receipts are Rs 3,580 crore less than what the state projected in the fiscal consolidation map as per the recommendation of the 13th finance commission on account of share in central taxes, own tax and non-tax revenue, and grants from the central government. The budget for the year 2013-14 had projected the income from stamps and registrations at Rs 3,450 crore. The actual income was about Rs 1,000 crore less, at Rs 2,510 crore. In the same budget, non-tax income under the urban development head was pegged at Rs 600 crore. What the state treasury got was just Rs 95 crore.
Expenses cut to size
Likewise, the revenue expenditure is “cut to size” in each budget. The pension and retirement benefits were pegged at Rs 5,168 crore in the 2013-14 budget but reached Rs 6,031 crore in the revised estimates.
The power subsidy bill was Rs 1,000 crore more in the revised estimates of the year 2012-13 than what was budgeted.
The successive reports of Comptroller and Auditor General have indicted the state for “fudging” budget figures, but these are placed in the assembly only after presentation of the next budget and the opposition, too, doesn’t care to corner the government for the year gone by. So the pattern continues.
The 2014-15 budget has pegged grants-in-aid from centre at Rs 8,230 crore, almost 50% higher than last year. The projections of income from VAT (value-added tax), stamps and registrations and excise are all “highly optimistic”.
No entries for FCI bills
Yet another indication of how Punjab keeps its account books is that though it is claiming a Rs 10,000-crore waiver as part of the overall Rs 1-lakh-crore bailout package from the Centre on account of current value of incidentals not paid for by the Food Corporation of India, there are no book entries in this regard to support the claim; reasons why the Centre has been turning down Punjab’s request for the same.
However, Punjab finance minister Parminder Singh Dhindsa argues that the entire Rs 1 lakh crore outstanding debt of the state is actually a legacy of the decade-and-a-half-long militancy era. “The debt of Punjab grew 15 times during this period from Rs 1,000 crore in the year 1981-82 to Rs 15,250 crore by 1996-97. Of this figure, at least Rs 12,000 crore was militancy-related debt. The waiver of the special term loan came by in over a decade after this. By this time, Punjab had paid interest and a part of the special term loan in addition to interest and principal for other outstanding loans. Factoring both the depreciation in value of rupee and inflation, the current value of that Rs 12,000-crore militancy-related debt of the year 1996-97 by now has grown exponentially and touched over Rs 1 lakh crore,” said Dhindsa.
He also contends that in real terms, the debt of Punjab has not grown and is well within the limits of its GSDP (gross state domestic product). “If our debt figures have gone up, so has our GSDP. Our public debt, raised from market loans and borrowing from financial institutions, is what all states do. It is the legacy of the militancy-time debt that is still killing us,” he added.
How revenue expenditure piled up
Salaries: Rs 254 cr
Pension and other retirement benefits Rs 8.8 cr
Interest payment on loans Rs 62 cr
Salaries Rs 1,068 cr
Pension and retirement benefits Rs 126 cr
Interest payments Rs 332 cr
Salaries Rs 4,287 cr
Pension and retirement benefits Rs 1,116 cr
Interest payment Rs 2,343 cr
Power subsidy Rs 604 cr
Salaries Rs 9,820 cr
Pension and retirement benefits Rs 3,094 cr
Interest payment Rs 5,763 cr
Power subsidy Rs 3,120 cr
Salaries Rs 15,841 cr
Pension and retirement benefits Rs 6,886 cr
Interest payment Rs 8,380 cr
Power subsidy Rs 5,300 cr