Punjab's committed expenditure,including salary, pension, interest payments and power subsidy continue to take up over 80% of the revenues, leaving lesser funds to spend on development activities.
In the state Budget which was presented on Wednesday by Punjab finance minister Parminder Singh Dhindsa at State Assembly, committed expenditure including salary, wages, pension benefits, interest payment and power subsidy on borrowings will account for 82.27 per cent of state's total revenue receipts during 2014-15.
The expenditure on salary, wages, pension benefits has been projected at Rs 23,258 crore, while interest payment on debt are projected at Rs 8,380 crore for current fiscal, as per budget documents.
Punjab FM projected total revenue receipts and revenue expenditure of Rs 44,894 crore and Rs 49,146 crore respectively for current fiscal, as per state budget.
Despite drawing criticism from several quarters, including experts for giving free power to farm sector, Shiromani Akali Dal (SAD) and BJP led state government continued to stick to this populist measure as it has projected power subsidy bill to the tune of Rs 5,300 crore for 2014-15.
Punjab government has been doling out free power to 10 lakh farmer families and up to 200 units of free power to 5 lakh BPL and 18 lakh SC families in the state.
The subsidy bill on account of free power had gone up from Rs 2,543 crore in 2007-08 to Rs 5,300 crore (Budget Estimates) in 2014-15.
Having not been able to contain its burgeoning expenditure, the state's committee expenditure has been on higher side.
Punjab's committed expenditure as percentage of revenue receipts was 79.71 per cent in 2009-10, 100.86 per cent in 2010-11, 84.56 per cent in 2011-12, 89.09 per cent in 2011-12, 80.44 per cent in 2012-13 and 80 per cent in 2013-14.
With higher share of funds swallowed by committed expenditure, the state has not been able to spend as much as it had targeted on development.
The state government had projected to spend Rs 27,062 crore on development (including social services, economic services and compensation to local bodies) in 2012-13 but as per revised estimates, development expenditure shrunk to Rs 22,096 crore.
In 2013-14, state projected development expenditure of Rs 30,621 crore but as per revised estimates, it went down to Rs 28,065 crore.
Dhindsa has blamed high level of outstanding debt, declining share of central taxes, implementation of pay commission report for not being able to adhere to targets of 13th finance commission.