E-Paper
Punjab tells officials to cut wasteful expenditure, meet revenue targets
Warns of action in case of failure to meet targets without “reasonable justification” or spending in excess of budgetary allocations; the Punjab government, which presented its budget for FY23 on June 27, has told them that these targets have been set after due deliberations with the administrative departments which are expected to work towards revenue maximisation
Faced with severe financial stress, the Punjab government has given strict instructions to all its senior officers to meet their tax and non-tax revenue targets for financial year 2022-23 and cut wasteful expenditure, warning them of action in case of failure to meet the targets without “reasonable justification” and spending in excess of budgetary allocations.
The state government, which presented its budget for FY23 on June 27, has told them that these targets have been set after due deliberations with the administrative departments which are expected to work towards revenue maximisation. The department, which fails to achieve the revenue target as budgeted for the current fiscal without reasonable justification, may face a reduction in its budgetary allocations towards expenditure, according to detailed instructions sent out by the finance department to all administrative secretaries, heads of departments and other senior officers following a review last month.
The officials have also been told that the achievement or underachievement of revenue targets will be specifically reflected in their annual appraisal reports and strict disciplinary action may be initiated for major penalty against low performers. Finance minister Harpal Singh Cheema has, in the maiden budget of the Aam Aadmi Party (AAP) government in Punjab, projected a 20% increase in the state’s own tax revenue in the current fiscal over the revised estimates for 2021-22.
Though he did not announce any new tax, the finance minister banked primarily on a jump of 27% in the goods and services tax (GST) collection and 55% in state excise for additional tax resources. In non-own tax revenue, an increase of 11% has been estimated. Revenue mobilisation is critical for Punjab, which was listed by the Reserve Bank of India (RBI) among the five most fiscally stressed states in the country just two months ago, to pull itself out of debt trap. In a white paper tabled two days before the state budget, the AAP government had painted a grim picture of state finances, which, it said, were in a free fall.
Also, the AAP government, which took charge in March this year, needs to find resources to fund 300 units of free electricity a month for all domestic consumers rolled out from July 1 and the pending promise of ₹1,000 a month to every woman. The two promises are estimated to entail an additional burden of more than ₹15,000 crore annually on the exchequer.
‘Fix monthly, quarterly revenue targets’
The administrative secretaries have been told to fix monthly and quarterly targets for revenue collection by the finance department which plans to review the progress at the highest level. Instructions have also been issued to all departments to deposit the receipts from taxes, user charges, fees, etc. in the state treasury. “Disciplinary action against erring officials will be initiated in case of any retention of state revenue or receipts in their line departments,” read the guidelines. In the past, there have been instances of departments parking funds in their accounts.
Depts to tighten the belt, expenditure limits set
The government, while stressing the need to cut wasteful expenditure, has set quarterly limits on expenditure. “The departments have been asked to plan the expenditure in a manner that not more than 45% of the budget provision is spent up to 2nd quarter and thereafter the spending should be 35% and 20% of the budgetary allocation in the 3rd and 4th quarter of this financial year,” a senior official said. According to the instructions, expenditure in excess of the budgetary allocation provided for in BE 2022-23 with the prior approval of the finance department will not only invite strict disciplinary action but also summary rejection of such a proposal of revision of budget. Prior approval of the finance department is also mandatory before incurring or committing any expenditure on foreign travel, purchase of staff cars and other vehicles, etc.
