As fiscal ends, new Punjab govt stares at Rs 17K-crore bills
The Captain Amarinder Singh government’s call for austerity may well be more than symbolism. Dues of dearness allowance (DA), power subsidy and pending payments for development works — the last government has left the new one a rather unenviable legacy of Rs 17,000-crore pending bills.punjab Updated: Apr 01, 2017 09:00 IST
The Captain Amarinder Singh government’s call for austerity may well be more than symbolism. Dues of dearness allowance (DA), power subsidy and pending payments for development works — the last government has left the new one a rather unenviable legacy of Rs 17,000-crore pending bills.
“The state was either using ways and means advances (they are meant to tide over temporary mismatch in revenue and expenditure) or overdraft for 301 out of 365 days last year. Nearly Rs 17,000-crore bills are pending. Even an aircraft needs a runaway before take-off. Sadly, the previous government has not left us even that luxury,” says Punjab finance minister Manpreet Badal.
The cabinet in its first meeting had put on hold ongoing projects sanctioned by the previous government. Chief minister Captain Amarinder Singh will on Saturday review the Urban-Rural mission, the pet pre-poll project of former deputy chief minister Sukhbir Badal, under which infrastructure works — roads, sewerage, water supply — worth Rs 9,502 crore were sanctioned, of which funds to the tune of Rs 4,518 crore have been released and the government may have to foot the remaining liability of Rs 3,412 crore for projects already underway. Projects worth Rs 1,567 crore that are yet to take off may be shelved by the incumbent government.
The loans for the Urban-Rural mission were raised by the Punjab Infrastructure Development Board (PIDB), which has the CM as its chairman. To service the loans, the cash-rich board’s future earnings too have been pledged. With infrastructure cess collected on foodgrain being its main source of revenue, the PIDB will also have to brace for the impact of the goods and services tax (GST) once it rolls out later this year.
In addition to liability of ongoing projects, the power subsidy of 2015-16 is also pending. The state is footing Rs 5,800 crore for free power to farmers and poor Scheduled Castes families every year. Though it was able to meet its commitment for this year, it has yet to clear the nearly Rs 2,000 crore of the previous year’s subsidy. Dearness allowance dues of Rs 2,800 crore are also awaiting money in state’s treasury.
GST IMPACT: ‘CENTRE TO COMPENSATE FOR VAT’
Union finance minister Arun Jaitley held a meeting with state finance ministers on GST at New Delhi on Friday. According to Punjab FM Manpreet Badal, the net impact of GST on Punjab may not be a cause for worry. “The union FM has assured to compensate us for VAT at the growth rate of 14% for five years, which is higher than our present growth rate of 7-8%. But we have yet to understand the impact on service tax, mainly in case of telecom companies that have other cities too in their geographical circles,” he said.
FM TO SEE HOW WB, KERALA GOT IT RIGHT
When Manpreet Badal was the Punjab finance minister in the Parkash Singh Badal government in 2010, he had pleaded the state’s case for a financial bailout from the Congress government at the Centre. The then Union finance minister, Pranab Mukherjee, had clubbed Punjab’s case with the other worst debt-stressed states — West Bengal and Kerala. But none got any relief from the 14th finance commission.
Now, Punjab has slipped to the bottom of the ladder and both Kerala and West Bengal have tided over the situation rather remarkably. The state government is now planning to study how the two governments got it right. “A high-level committee headed by the finance minister may go (to these states) to understand how the two debt-stressed states managed to pull themselves out on their own,” sources in the finance department said. Ironically, as the Congress finance minister, Manpreet is once again pleading Punjab’s case for debt relief, but with Union finance minister from the Bharatiya Janata Party.
First Published: Apr 01, 2017 08:49 IST