Punjab proposes austerity measures in budget 2012-13 | chandigarh | Hindustan Times
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Punjab proposes austerity measures in budget 2012-13

chandigarh Updated: Jun 20, 2012 23:20 IST

Facing "poor" fiscal situation, Punjab finance minister Parminder Singh Dhindsa today proposed austerity measures including 10 per cent cut in ministers' allowances and reduction in fuel and office expenses to raise Rs 250 crore, but spared the public from new taxes.

He also announced free tablets for 1.5 lakh students and monthly allowance to graduates to pursue higher studies and vocational courses.

Presenting the first Budget of the re-elected SAD-BJP government with a total size of Rs 57,648 crore, the finance minister pegged the additional resource requirement of Rs 2,000 crore to finance annual plan of Rs 14,000 crore for the 2012-13 fiscal.

"We propose to generate this (Rs 2,000 crore) by cutting down on unproductive expenditure and through other austerity measures, better tax administration and tax compliance. There is also scope for rationalising some taxes and levies," Dhindsa said in the Budget speech in the state assembly here.

Dubbing his maiden Budget as "balanced, growth and welfare oriented", Dhindsa also pegged the revenue deficit at Rs 3,123.31 crore for 2012-13, which is 1.14 per cent of Gross State Domestic Product (GSDP) and fiscal deficit at Rs 8,923.92 crore -- 3.26 per cent of GSDP.

Trying to match up the election manifesto promises made by the SAD, Dhindsa announced free tablets to 1.50 lakh students of class 12th, which will cost Rs 110 crore to the state exchequer. The students of class 11th would be covered next year.

SAD had, however, announced giving free laptops to students in the election manifesto.

Dhindsa also announced to give employability allowance of Rs 1,000 per month to all graduates registered with employment exchanges for more than three years.
"They (students) will get allowance of Rs 1,000 per month for pursuing higher studies and vocational courses," he said.

The austerity measures announced by the finance minister are putting a ban on purchase of new government vehicles, 10 per cent voluntary cut in allowances of ministers and chief parliamentary secretaries, 10 per cent cut on fuel and cut in maintenance and repair expenses of government vehicles.

Besides, it has proposed 10 per cent cut on electricity and telephone bills of the offices and office expenses a and complete ban on renovation or furnishing of government offices. It has also proposed postponement of leave travel concession for one year except for government employees who are retiring this year.

"All these measures would result in an annual saving of Rs 250 crore," Dhindsa said while thanking his cabinet colleagues and the chief parliamentary secretaries for coming forward to voluntarily offer to accept 10 per cent cut in their allowances.

He said the annual plan for 2012-13 has been increased by 22 per cent to Rs 14,000 crore, which has already been approved by the Planning Commission.

The annual plan focuses on development of infrastructure in power, roads, rural water supply and sanitation, water supply, sewerage and sewage treatment plants in municipal areas, he said. However, he said plan performance during the 11th Plan period has been 80 per cent.

Stating that rural debts in Punjab are estimated to be Rs 35,000 crore, which was the main reason behind farmers' suicides in the state, Dhindsa proposed to launch a new scheme for providing financial assistance of Rs 2 lakh to the dependents of such families from 2012-13 by earmarking an outlay of Rs 30 crore.

"The number of indebted farm households in Punjab was 66 per cent, third highest in the country after Andhra Pradesh and Tamil Nadu. Government of India had announced debt waiver scheme for farmers in 2008-09 but the farmers of the state did not benefit much as there are less number of small and marginal farmers and few defaulters in the state," he said.

"The state government has commissioned a study on suicide by farmers and farm labour from the three universities in the state. The state government would examine the study reports and try to address the underlying causes of suicides," he added.

Interrupting Dhindsa, the leader of opposition Sunil Kumar Jakhar said that by allocating funds of Rs 30 crore for families of farmers who committed suicides, the state government has admitted that around 1,500 farmers had committed suicides in the state because of debt burden.

The state Budget proposed that the power subsidy - which has been a drain on state resources -- at Rs 5,100 crore for 2012-13, up from Rs 4,200 crore given last year. Punjab gives free power to farmers and SC families.

Punjab has kept the total outlay for power sector at Rs 3,300 crore for 2012-13, constituting 25 per cent of total annual plan.