With its financial condition bleak, the Parkash Singh Badal-led Punjab government has started selling its assets to meet urgent fiscal obligations such as payment of salaries, pensions and in clearing Reserve Bank of India overdrafts.
So grim is the plight of the Shiromani Akali Dal-BJP coalition government’s finances that due to mounting overdrafts it borrowed R1,000 crore from Punjab Urban Planning and Development Authority (PUDA) last week to run its day-to-day fiscal affairs.
The slide in the state’s finances is being attributed chiefly to the fall in revenue receipt targets and ballooning of the salary and pension bill.
While top government functionaries describe the state’s financial health as “precarious”, chief minister Badal has been maintaining that “the financial position of the government is sound”.
As per official figures, about R20,750 crore is the annual salary, wages and pension bill of the state which accounts for the bulk of Punjab’s revenue receipts as R20,000 crore comes from VAT - the biggest source of revenue.