Punjab Budget fails to stem Punjab’s slide to financial bankruptcy

By Tarun Chugh

The Aam Aadmi Party (AAP)is taking Punjab to financial bankruptcy. The party of freebies has no sense of economy, which can be seen from the Budget presented by Finance Minister Harpal Singh Cheema, who has shown complete lack of ideas to stop the state receding to to financial bankruptcy.
Punjab Budget by the AAP government is of Rs 196,462 crores. Cheema said that it’s 26 per cent more than Rs 1,55,869 crores budget of last year. But there is hardly any revenue growth to support the Budget size. Thus, the AAPgovernment is pushing Punjab into debt trap with more loans. Punjab is already deep into debt.
The Reserve Bank of India in its report on the state of financial health of a few states has expressed concerns at the prevailing situations. This is captured in the official data, as the revenue deficit has spiked from 1.99 per cent in 2022-23 to 3.32 per cent. Consequently, fiscal deficit has zoomed from 3.78 per cent in 2022-23 to 4.98 per cent proposed for 2023-24 fiscal. The situation has further aggravated on the financial situations of Punjab, as the Goods and Services Tax (GST) collections remained at Rs 19,000 crore against a target of Rs 20,550 crore in the current fiscal. This accounts for a shortfall of Rs 1,500 crores.
Punjab is yet to come out with an industrial policy as promised by the AAP government even while industrialists are visiting Uttar Pradesh and other states in search for alternative investment opportunities. Economic activities seek peace and tranquility as a precondition. But the Punjab government’s evident neglect of the law and order situation is clearly making negative impact on the economic activities. This has clearly been captured by the state government missing out on achieving the targeted GST collections.
The poor track record on the revenue front has been documented by the state Budget. Against the target by the state government of Rs 95,378 croresin revenue receipts, Punjab could manage just a net of Rs 93,563.21 crores. This is being bridged by additional borrowings. The Central government has already flagged that Punjab’s debt situation is worrisome. Independent economists have for years been calling for corrective measures. But the incumbent Punjab government is paying least regards to the wellbeing of the future generations of Punjab by pushing the state further into debt trap.
The ability of the state agencies to collect revenue is under severe stress. This can be seen in the performance of the transport department. Punjab Roadways could earn only Rs 90 crores against a target of Rs 335 crores set by the state government. Similarly, urban development revenue is also short by Rs 69 crore as the government could collectonly Rs 200 crores.
The total debt of Punjab in 2022-23 fiscal was pegged at Rs 31.12 lakh crores. Punjab’s debt has now zoomed to an estimated Rs 3.47 lakh crores. The state debt is close to 180 per cent of the annual budget of Punjab. This makes the financial situation scary for Punjab, and the state government may soon begin defaulting on its obligations, while also compromising aspirations of the people to create assets in education and health for better prospects of the future generations of the state. Already, the youth in Punjab are battling extraordinary unemployment situation, making them vulnerable to fall victims to drug cartels and organized armed gangs.
This is being reflected in the state of education as the state against the promise of enhancing 100 schools to the status of institutions of eminence has just added 13 more number, while actual world could take place only in the case of four schools in the last one year. It must be stressed that the AAP is running the government in Punjab now for almost one year.
In a survey of 30.46 lakh beneficiaries in Punjab conducted by the Department of Social Security, Women and Child Development, it was found that the number of beneficiaries dipped by a whopping 90,248. The state government failed to undertake construction of houses for the economically weaker sections last year. But that has not stopped the AAP government from making a promise to build 10,000 houses in this fiscal. The performance of the state government on environmental management, solid waste management and several other areas remains abysmal, making the state cut a sorry figure on the national stage.
On the health front, the Punjab Budget has made attempts to be clever by re-packaging the Central government’s ‘Ayushman Bharat Health and Wellness Centres’ into ‘Mohalla Clinics’. The state government is just trying to be clever to misguide the people in the state.
The status of Punjab being a debt-laden state has begun showing impact on several fronts. The state is not able to modernize the police. The organized armed gangs are equipped with automatic assault rifles. The police are steps back from the gangs whose writ run large in the state.
(Author is the national general secretary of the Bharatiya Janata Party).