Punjab in deeper financial mess than what we initially thought: Reforms panel chief KR Lakhanpal
Lots of revenue was kept out of the consolidated fund of the state, though it accrued out of cess, surcharge and taxes levied by the state.punjab Updated: May 13, 2017 09:03 IST
Punjab expenditure and governance reforms commission chairman KR Lakhanpal said the fiscal mess in the state is far deeper than it was originally thought.
The commission chairman said the state government is in the process of gathering information to ascertain its full scale and status of the mess, as many things were done off the books. “Lots of revenue was kept out of the consolidated fund of the state even though it accrued out of cess, surcharge and taxes that were levied by the state exercising its sovereign power. Similarly, lots of expenditure was made in this manner,” he told Hindustan Times, citing revenues and expenditure related to rural development fund and infrastructure development fund as examples.
Lakhanpal, handpicked by the chief minister to head the commission, said loans were being raised with government guarantee, future revenues of public sector undertakings mortgaged without even being sure whether these revenue streams are going to continue or not and liabilities deferred. “All of this is not reflected in government books and has to be quantified. A forensic audit is needed to find out where this money was spent,” he said.
Dwelling on the solution, the former chief secretary said this is structural imbalance, not a cyclical imbalance. “You need structural correctives. As they say, economy is not in sparing the expenditure, but spending the money wisely. Whatever we have needs to be spent wisely on the felt needs of people. With resources being limited, prioritisation is important. There is a need to be careful about new projects,” he said.
The commission chairman said his suggestion to the state government would be to make the already made investments productive, whether it is drinking water, sanitation etc.