Skirting the much-needed bold steps to course correct Punjab’s worsening fiscal health, state finance minister Parminder Singh Dhindsa on Wednesday presented in the Vidhan Sabha a bland budget that neither imposed any tax nor proposed any new development scheme for the year 2014-15.
Status-quo-ist in content and intent, the 48-page budget document offered no definitive roadmap for narrowing the burgeoning revenue deficit of Rs 4,252 crore and ramping up the revenue receipts: steps necessary to revive the state’s economy.
The finance minister presented the budget in the absence of chief minister Parkash Singh Badal, who had rushed to the national capital to meet union home minister Rajnath Singh on the issue of Haryana legislation for a separate body for managing Sikh shrines in the neighbouring state. After the opposition Congress pointed out Badal’s surprising absence from the Vidhan Sabha, speaker Charanjit Singh Atwal informed the House that the CM would not be able to attend the proceedings for another three days and that he had permission for this.
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Last year, the revenue-deficit projection was revised from Rs 1,746 crore to Rs 5,259 crore. So alarming is the fiscal downslide that and so sluggish the growth in revenue receipts that this fiscal it may rise manifold from the projected Rs 4,252 crore. The fiscal deficit is projected to be Rs 10,372 crore, as committed expenditure is growing with steep rise in salary, pension and interest payment bills.
Conceding that the government is under severe “fiscal stress” and the revenue and fiscal deficits are rising, the finance minister also accepted that the state was left with “little resources for development”, as a huge outstanding debt was leading to heavy expenditure on debt servicing.
The budget document mentions a slide in the revenue receipts last year from estimated Rs 42,665 crore to the actual Rs 39,850 crore. For this fiscal, the target is Rs 44,893 crore. The tax collection last year was a grim Rs 26,403 crore against the budget estimates of Rs 28,524 crore, a shortfall of Rs 2,121 crore.
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Not being ambitious
The current-year own tax revenue target is Rs 28,480 crore, lower than the previous-year budget estimates. Not setting ambitious target for collecting non-tax revenue, the government hopes for Rs 5,400 crore from central taxes and of Rs 8,230 crore from grants-in-aid from the Centre (up from last year’s estimates).
Dhindsa said that in the year 2012-13, the state had mobilised Rs 22,588 crore as own tax revenue, registering 19.89% growth. But, last year, the state’s own tax revenue grew at 6.60%. “For the year 2014-15, the estimated is Rs 28,480 crore, with a growth rate of 18.28%,” the finance minister said.
Same VAT target
Last year, the government collected Rs 1,011 crore less value-added-tax (VAT) than the target of Rs 17,760 crore, and for this fiscal, the targets remains the same. The government failed to achieve its revenue-collection target from excise, stamps and registration, and automobile taxes.
Much to hide
The budget speech was focussed on only the ongoing schemes and replete with assumptions, attempting to hide more than it revealed about the true fiscal health and allocation to different departments.
In the last budget, the state government said the support to Punjab Agricultural University (PAU) had increased from Rs 124 crore (in the year 2011-12) to Rs 270 crore (in the year 2012-13) and will be further enhanced to Rs 300 crore in the year 2013-14. But the budget presented today reads: “The state government has released Rs 148 crore to Punjabi University, Patiala; Panjab University, Chandigarh; and Guru Nanak Dev University, Amritsar, during 2013-14 and provided Rs 161 crore for this purpose during 2014-15.”
For sport, the allocation last year was Rs 91 crore, while this year, it has been slashed to Rs 33 crore. Education gets Rs 1,859 crore, up from the previous Rs 1,275 crore. However, the allocation under the Sarva Shiksha Abhiyan programme has been reduced by Rs 243 crore; and there is a Rs 51-crore cut in money to the computer education project for Classes 6 to 12.
To the health sector last year, Rs 3,443 crore was committed and, this year, the proposal is to spend Rs 1,022 crore.