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Electricity, diesel, petrol bills set to shoot up in Punjab

Electricity, diesel and petrol bills are set to shoot up in Punjab. The severely cash-starved Parkash Singh Badal-led government on Wednesday finally injected a dose of taxes in the garb of resource mobilisation - an exercise that will generate more than Rs 1,400 crore per annum.
Hindustan Times | By Pawan Sharma, Chandigarh
UPDATED ON MAY 20, 2015 11:11 PM IST

Electricity, diesel and petrol bills are set to shoot up in Punjab.

The severely cash-starved Parkash Singh Badal-led government on Wednesday finally injected a dose of taxes in the garb of resource mobilisation - an exercise that will generate more than Rs 1,400 crore per annum.

Also, buying property will be a costly affair as 1% infrastructure development (ID) fee will be charged for purchasing immovable property within Punjab.

After announcing the appease-all power tariff without any hike recently, the government took the cabinet route on Wednesday to burden the consumers and decided to impose 5% tax on the total electricity bill.

This means that consumers will now be charged Rs 5 for every Rs 100 of the value of the electricity consumed, being supplied by the Punjab State Power Corporation Limited (PSPCL) across the state. This levy will be part of the ID fee.

While the ID fee on the sale of petrol has been hiked from the existing Re 1 to Rs 2 per litre, consumers will also have to pay Re 1 per litre ID fee on diesel within the state.

Already, Punjab is one of the states where value-added tax (VAT) on diesel (11.25%) is also the highest. The Badal government also imposes 10% surcharge on diesel and VAT plus surcharge on diesel in Punjab is 12.30%, while in neighbouring Haryana the VAT on diesel is less than Punjab.

This is just within two months of presenting a tax-free budget for this fiscal with a massive revenue deficit (Rs 6,394 crore) that the government, which has been struggling to pay salary, pension and interest on loans, decided to impose a slew of taxes.

Such lopsided is the fiscal health of the government that in the 2014-15 budget, it projected its revenue deficit at Rs 4,252 crore, which finally shot up to Rs 6,240 crore - indicating a yawning gap in revenue receipts and expenditure.

Government sources say the money generated from Wednesday's measures would not go to the state's consolidated fund. Instead, the finances coming from this ID fee will go to the Punjab Infrastructure Development Board (PIDB).

"The state government is embarking on a major programme to upgrade rural and urban infrastructure, which would require a few thousand crores of rupees. As part of this ambitious programme, the funding will come from the enhancement of the ID fee. These measures are likely to mop up additional revenue of nearly Rs 1,400 crore annually," a government spokesperson said.

Even as the SAD-BJP regime has been in power since March 2007, deputy chief minister Sukhbir Singh Badal said: "The infrastructure sector, including basic needs of citizens such as water, sewerage and other civic amenities, had been ignored for more than 60 years."

It is for first time, he claimed, that any government had drawn up a composite plan for integrated development of all urban areas, including 140 towns and more than 12,000 villages "in one go in one-and-a-half years."

Referring to the resource mobilisation steps, the deputy CM, known for making tall claims which are often contrary to the ground reality, said: "More than Rs 5,000 crore would be required for the development of composite infrastructure. The Punjab government has moped up resources to give it a time-bound push."

Sukhbir admitted that the amount collected from Wednesday's additional resource mobilisation would go "into a control kitty" from where it would be "spent on systematic upgrading of infrastructure."

Entry tax on sugar; other key decisions

The Punjab cabinet has on Wednesday approved introducing 11% entry tax on the sugar being brought into the state.


On the lines of the existing facility in rural areas, the state government has decided not to charge stamp duty and cess on transfer of immovable property to members of the family, including spouse, in urban areas. The cabinet also reduced the stamp duty on the registration of power of attorney from 2% to 0.5%. A 0.5% stamp duty, however, will be adjustable towards the payable stamp duty at the time of executing property-sale deed. On all other power of attorney papers, a stamp duty of `2,000 will be levied.


Punjab State Warehousing Corporation will build steel silos of 15-lakh-metric-tonne food grain storage capacity. The All but 2.75 lakh MT of existing storage capacity is in the form of conventional covered warehouses and open plinths.


Police will recruit 10 DSPs, 50 sub-inspectors, and 65 constables from medal winners in the Olympics, Asian and Commonwealth Games, World Cups, and other national/international competitions. The hiring will be on the recommendation of a screening committee that the state government will constitute. After police training, the decorated athletes will be attached with the sports department for 10 years or until they are 40, whichever is earlier. They will also give training to budding players.


To encourage the participation of foreign key players in healthcare and medical research, the cabinet gave approval to amending the Land Allotment Policy, 2014, for the allotment of plots for hospitals, multi-specialty hospitals, medical colleges-cum-hospitals, and medical research institutes in the upcoming Medicity project at New Chandigarh (Mullanpur). The amended policy allows participation of 100%-owned subsidiaries and joint ventures of foreign health institutions. It also allows any subsidiary company to apply for allotment on behalf of the parent company. The interested foreign players must fulfil the FEMA (Foreign Exchange Management Act) and FDI (foreign direct investment) terms and conditions under in conformity with the guidelines of the Government of India and the Reserve Bank of India (RBI).


The cabinet gave a go ahead for the transfer of 5-acre vacant land of Government College, Muktsar, for the construction of new Panjab University Regional Centre complex to replace a dilapidated building that has been declared unsafe.


The cabinet also gave ex-post facto approval to extend the contracts of 517 service providers and 531 sweepers working in 582 veterinary hospitals across the state from December 1, 2014, to December 31, 2015, as a stop-gap arrangement.


For the first time, the high-security second floor of Punjab Civil Secretariat, which houses offices of the chief minister, deputy CM and senior functionaries, was out of bounds for news reporters on Wednesday. As the cabinet meeting was underway, scribes started trickling in but the policemen standing guard turned them back politely and apologetically. They cited “orders” from the political bosses. Later in the afternoon, in an apparent damage-control exercise, the government fielded director public relations (DPR) Rahul Tewari (an IAS officer), who called up certain journalists and expressed “regrets for the inconvenience”, blaming a “communication gap” for restricted entry.


Deputy chief minister Sukhbir Singh Badal chaired the cabinet meeting, as chief minister Parkash Singh Badal was stated to be unwell.

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