Punjab finance minister Manpreet Singh Badal will unveil his budget for the financial year 2018-19 today (Saturday).
His budgetary proposals will be scrutinised closely, as the state finances have been causing serious concern. Burdened by growing financial liabilities, the finance minister faces multiple challenges in finding ways to raise additional resources and prune expenditure at the same time.
There is also growing pressure to provide funds for cash-guzzling poll promises, particularly farm debt waiver, power subsidy, unemployment allowance, hiked social pensions, free smart phones etc. In its first year, the Congress government that inherited “empty coffers”, spent much of its time struggling to find resources to pay the state employees on time and clear the outstanding payments towards its share in centrally sponsored programmes for further releases, besides apportioning funds for welfare schemes.
Also, there have been no major signs of increase in revenue inflows or sweeping steps so far to cut expenses. The government revenue receipts have reported an increase of about 9% over the previous fiscal against 17% projected in budget estimates. Similarly, the 12% growth in the state’s own tax revenue is way below 32% estimated at the start of the year, according to official data.
With over 52% of revenue going into payment of salary and pensions, and power subsidy bill and interest payments rising continuously, there are indications that the finance minister may impose new taxes or revise rates to mop up additional resources. With own tax revenue accounting for almost two-thirds of its revenue receipts, experts feel the state’s capacity to raise taxes is limited, but where it can make up is by generating more income from its own non-tax revenue. The share of non-tax revenue of 5% in the state’s revenue is one of the lowest among the states.
{{/usCountry}}With over 52% of revenue going into payment of salary and pensions, and power subsidy bill and interest payments rising continuously, there are indications that the finance minister may impose new taxes or revise rates to mop up additional resources. With own tax revenue accounting for almost two-thirds of its revenue receipts, experts feel the state’s capacity to raise taxes is limited, but where it can make up is by generating more income from its own non-tax revenue. The share of non-tax revenue of 5% in the state’s revenue is one of the lowest among the states.
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