Q Did it get the diagnosis right?
Only partly. The budget underlines Punjab’s problems ranging from a mounting fiscal stress, ballooning debt and below-the-target revenue collections, to growing unemployment and a sputtering economic growth. But, it fails to recognise the structural problems afflicting the state’s economy, such as revenue-eroding populist doles and a stagnant farm sector. The budget has a clear imprint – ideologically as well literally – of chief minister Parkash Singh Badal, an artful populist, and his son-deputy Sukhbir Singh Badal, the dream merchant, as only their photographs adorn the 47-page budget document.
Q How will the budget impact you?
Not directly and immediately because it’s a budget with no new taxes. But, precarious financial health leaves hardly any money to push the development cart. This will have an adverse bearing on infrastructure, job creation and social services including education and health. In other words, take the ‘achhe din aane wale hain’promise with a pinch of salt!
Q Does the budget outline a fiscal recovery plan?
Not at all. Rather, it only restricts itself to portraying a gloomy picture of degrowing revenue and a ballooning debt lately pegged at ? 1 lakh crore. By March next year, the debt burden will touch ? 1.13 lakh crore – 31% of the gross state domestic product (GSDP). It offers no plan to cut wayward expenditure and downsize, or at least rationalise, runaway subsidies bleeding the state coffers.
Q Is it reformist?
Not the least. It rather perpetuates status quo. It shies away from radical policy reforms in power, health and education sectors. Even the governance reforms, the much-touted plank of deputy CM Sukhbir Badal, finds only a fleeting mention with no roadmap on deepening the citizen-centric reforms.
Q Will the budget math work?
Unlikely. A high level of debt, declining share in central taxes, burgeoning pay/pension liabilities and debt servicing – all put together means the state has failed to achieve the revenue deficit targets. Worse, the revenue receipts are in a de-growth cycle, falling short by Rs 6,000 crore. Which means the state will not be able to meet its new annual plan of Rs 20,100 crore.
Q Does the budget offer new schemes?
Hardly any. It’s heavily premised on existing schemes, most of them centrally funded. Q Will it boost sentiment? Very unlikely. Beyond a bland listing of the incentive package announced at the Progressive Punjab Investors’ Summit in December last year which was attended by some of the top most industrialists of the country, the budget offers no lifeline to the languishing trade and industry in the state, while it lacks blueprint on the much-needed ‘second push’ to stagnant agriculture. A negative reaction of traders and industrialists to the budget only underscores the point.
Q What is the politics of this budget?
Pamper your votebanks at the expense of the state exchequer and pester the NDA government for a special package to help pull the state out of a largely self-made financial quagmire. In fact, upfront in his budget speech, finance minister Parminder Singh Dhindsa sought the NDA government’s benevolence, hoping it would be responsive to Punjab’s problems. But, given that Punjab missed aligning itself directionally with the union budget that eschewed fiscal profligacy, it’s unlikely that the Modi government would meet the state’s hefty wish list on the financial package in the near future.
Q Why no new taxes?
It boils down to lack of political will. As the key resource-guzzling doles cater to the Shiromani Akali Dal’s rural support base, its alliance partner, BJP, resists levying tax on its urban constituency to bolster the state’s finances. This political gridlock leaves little legroom for widening the tax base.
Q What’s in it on the SAD-BJP’s poll manifesto?
There is self-patting for making Punjab ‘power surplus’. But, the third budget of the SAD-BJP government’s second term glosses over some of the key promises such as free laptops to all Class-12 students, employability allowance to youth and making the entire state ‘Wi-Fi’.