Punjab may have been trying "vigorously" to bring fiscal discipline but its financial health appears to be "poorer" than that of neighbouring state Haryana. On most of fiscal parameters, Haryana's fiscal situation is better than that of Punjab as it showed commitment towards following fiscal prudence path despite rising committed expenditure, as per budget documents of both the states.
Where Punjab is struggling hard to bring down its "soaring" revenue deficit (difference between revenue receipts and revenue expenditure), Haryana has aimed to become a revenue surplus state by 2013-14. As per Fiscal Responsibility and Budget Management Act, 2011, Punjab is supposed to bring revenue deficit to zero by 2014-15, though it looks quite a herculean task particularly in the wake of state's revenue deficit reaching Rs 6,838 crore in 2011-12 which is 2.35 per cent of Gross State Domestic Product (GSDP) against the target of 1.8 per cent.
While Haryana's revenue gap is projected at Rs 2,456 crore which is just 0.66 per cent of GSDP and despite higher wage bill and surging interest cost, the state is aiming to become a revenue surplus state in 2013-14. Notably, Haryana has consistently followed the targets set out in FRBM Act 2005 and remained a revenue surplus state for a period starting from 2005-06 till 2007-08. Punjab in last 12 years had never been able to turn into a revenue surplus state.
Haryana was carved out of Punjab in 1966 and total area falls in Punjab and Haryana is 50,362 sq km and 44,212 sq km, respectively. State governments have always earned wrath for not spending enough on development activities as bulk of its revenue is spent towards committed expenditure.
Punjab has projected that over 80 per cent of its revenue receipts would be "gobbled up" by salary, pension and debt servicing but in case of Haryana, this ratio is just 54 per cent, meaning thereby that the state would have enough funds to spend on development programmes. Punjab has projected committed expenditure of Rs 30,560 crore for current fiscal while Haryana has projected the same expenditure at Rs 20,169 crore.
Most importantly, Haryana has decided to clear all its salary bill worth Rs 6,000 crore in this year only and it will become the only state which paid its total wage bill in northern region. Punjab is expecting to clear the salary bill and arrears by June, 2013.
On the debt front, Punjab's debt liability is projected to reach a staggering figure of Rs 87,518 crore for 2012-13 and it will be 31.95 per cent of GSDP whereas in case of Haryana, state's debt is anticipated to reach Rs 60,437 crore which will be just 16.36 per cent of GSDP for current fiscal.
On revenue front, despite being a bigger state, Punjab's revenue receipts are nearly equal to that of Haryana. Punjab has projected total revenue receipts of Rs 38,043 crore for 2012-13, while Haryana is eyeing revenue of Rs 37,328 crore for same fiscal.
Aided by better tax discipline, Haryana has set an ambitious target of VAT to the tune of Rs 16,450 crore which is higher than Punjab's expected tax collection of Rs 14,213 crore for 2012-13. Punjab's capital expenditure, which gives push to state economy, has also been lower than that of Haryana. Punjab is estimating capital expenditure of Rs 3,960 crore for 2011-12 in comparison to Rs 5,439 crore projected by Haryana.
Even the annual plan of Haryana is bigger than that of Punjab with former proposing an outlay of Rs 14,500 crore for 2012-13 against Rs 14,000 crore proposed by Punjab.