Punjab budget today, focus likely on agri sector, jobs & healthcare
Punjab finance minister Manpreet Singh Badal will present his budgetary proposals for financial year 2021-22 in the state assembly on Monday.
The budget will be the last one of the present Capt Amarinder Singh-led Congress government ahead of the state assembly polls due early next year. The finance minister is expected to make fresh announcements and provisions for partially implemented or unimplemented promises with focus on the agriculture sector, jobs and healthcare, according to people associated with the budget exercise.
The budgetary proposals also hold significance as they will be presented in the backdrop of the ongoing farmers’ agitation led by cultivators from Punjab and Covid-19 cases in the state are also on an upward trajectory again even as it has fallen behind others in vaccination drive.
REVENUE DEFICIT GRANT, ADDITIONAL BORROWING
Though the state’s revenues, including goods and services tax collections, have been hit due to coronavirus pandemic this year and only started showing signs of recovery in the past three-four months, the ₹25,968-crore revenue deficit grant recommended by the 15th Finance Commission, including ₹10,081 crore for financial year 2021-22, will help cushion the impact. Also, the additional financial borrowing of 2% of the gross state domestic product (GSDP), which has been allowed by the Centre to states, is also likely to give the state headroom of ₹12,000 crore.
CHALLENGES FM NEEDS TO ADDRESS
However, many challenges, which together paint a grim picture of the state finances, lie ahead for the finance minister. The state’s rising outstanding liabilities being a matter of concern for the past several years. The debt-GSDP ratio has risen to 40% from 31% in 2012-13 and much of these borrowings go into debt. “Expenditure is rising much faster than receipts in the state creating fiscal sustainability challenges. Its trend growth rate of total revenue expenditure was 11.3% against a trend growth rate of own revenue receipts of 8.5% from 2011 to 2019,” a recent report said. Then, committed expenditure of 62% of the total revenue expenditure in 2018-19 was the highest among major states in the country even as a pay hike has been long due for the state employees. “With the current resource base, Punjab needs to either increase own revenue receipts’ growth rate to 12% during the next five years or reduce total revenue expenditure growth rate to 8%,” the finance panel said in its report. Another area requiring attention is capital expenditure, which took a severe hit in the current fiscal, to create income-generating assets.