E-Paper
2022-23 fiscal: Punjab: Salary, subsidy bill was 8% more than budget estimates
Punjab saw its expenditure on salaries, pensions and subsidies exceed the budget estimates by 8% during the financial year 2022-23, while revenue receipts fell short of the target.
Chandigarh
Punjab saw its expenditure on salaries, pensions and subsidies exceed the budget estimates by 8% during the financial year 2022-23, while revenue receipts fell short of the target.
The committed expenditure on payment of salaries and wages, pensions and other retirement benefits, interest payments and subsidy stood at ₹83,877 crore at the end of the financial year as against the budget estimates of ₹77,675.93 crore, according to the data on fiscal indicators for FY 2022-23 released by the Comptroller and Auditor General (CAG).
The outgo on ‘committed expenditure’ and power subsidy has been a cause of concern as it amounted to 95% of the total revenue receipts (TRR) during the previous year.
According to the report of the 6th Punjab Finance Commission headed by former chief secretary KR Lakhanpal, the state’s per capita expenditure on salaries and wages, pensions and interest payments is the highest even though its per capita income across 18 major states has slid from the first rank in 2002-03 to 10th rank in 2019-20.
The present Aam Aadmi Party (AAP) government, in its white paper on state finances tabled in the Punjab Vidhan Sabha in June 2022, also described the state’s financial condition as a “fiscal straight jacket, with no fiscal space”, as committed expenditure on salaries and wages, pension and retirement benefits and interest payments as a percentage of TRR ranged from 81.45% to 96% between 2011-12 and 2020-21.
According to the provisional data, the expenditure incurred by the state government on salaries/wages and pensions was up by 5% and 20% from the budget estimates. The subsidy bill – the bulk of it incurred on free electricity to agriculture and domestic consumers – also jumped by 30% to ₹20,607 crore from ₹15,846 crore earmarked in 2022-23. There was a drop in interest payments to ₹17,084 crore from the estimated ₹20,122 crore.
Finance and taxation minister Harpal Singh Cheema said the expenditure on employee salaries/wages and pensions went up because the state government gave more than 28,000 jobs in its first year, besides releasing dearness allowance to employees and pensioners. Another reason, according to people familiar with the state’s financial planning, for the increase in the expenditure on pensions was that the state was approaching the peak of its pension bill as major recruitments happened between 1998 and 2000 and the switch from the old pension scheme to the new one was made in 2004.
Revenue receipts up from FY 2021-22
At ₹87,557 crore in FY 2022-23, the revenue receipts of the state government were 12% more than the previous fiscal when it garnered ₹78,168 crore from tax, non-tax revenues and share of central taxes as well as grants-in-aid from the Union government, but fell short of the budget estimate of ₹95,378 crore for the year.
Punjab’s own tax revenue (OTR) of ₹42,324 crore, including goods and services tax, state excise, stamps and registration, sales tax, electricity duty, taxes on vehicles, and other duties was up by 14% from ₹37,324 crore in the previous fiscal. “The increase was primarily on account of good year-on-year (YOY) growth in state excise, goods and services tax and stamps and registration charges,” one of the persons quoted above said.
There was, however, a sharp dip in the value-added tax collection as the previous government slashed the tax on diesel and petrol a few weeks before the state assembly polls last year. The net burrowing during the year was ₹30,899 crore.
