The state government has estimated a debt burden of Rs 1 lakh crore for its five-year tenure, taking the inherited debt burden of Rs 1.82 lakh crore to Rs 2.82 lakh crore.
However, populist announcements and cash distribution for the 2022 state assembly elections will certainly increase the state’s debt burden by an estimated Rs 2.82 lakh crore.
A major part of the Punjab government’s earnings and borrowings is used to pay off its debt.
Chief Minister Charanjit Singh Channi Recently asserted that the state government has enough funds to fulfill these populist announcements.
Finance Minister Manpreet Singh Badal Total revenue receipts in this fiscal budget are estimated at Rs 95,257 crore, but the Congress government’s record for the last four years shows that it has never achieved more than 81 per cent of its revenue target. Though the finance minister has claimed to have brought the state’s economy back on track, the government’s financial statements say otherwise as about 40% of the state’s total estimated revenue receipts for the current financial year will go into servicing the total debt of Rs 95,257 crore. .
The politics of populism and the urge to divide Punjab over the years has brought the state to such a stage that a greater part of its earnings and market borrowings go towards repaying debt than capital expenditure. The rest of the revenue goes to unproductive expenditure such as distribution of salaries, pensions, power subsidies and loan waivers. The previous SAD-BJP government had actually spent Rs 54,280 crore on capital expenditure in 2016-17, the last year of its 10-year rule, but unlike the current Congress government in its last year (2021-22), only one provision was made. has kept. 34,135 crore in the budget for infrastructure development. At the same time, the Kovid epidemic has also made a big dent in the exchequer of the Punjab government like other states.
More worryingly, the state government has failed to find new avenues to generate its own revenue and exchequer mainly due to illegal mining, illegal liquor trade, and support given to private transport companies owned by influential politicians. Its laxity in preventing the loss of revenue to the Government transportation costs. The Goods and Services Tax (GST) regime was implemented with effect from July 1, 2017, under which the central government guaranteed a 14% year-on-year growth to the states over the 2015-16 fiscal by promising compensation for any shortfall. was given. Since the GST compensation disbursement, if not carried forward, will end in June next year and the Punjab government will surely bear the brunt.
The only saving grace for the state government is the increase in Value Added Tax (VAT) collections in the past due to continuous fluctuations in petroleum prices. The state recorded a VAT collection of Rs 4,024 crore during April-September this year as against Rs 2,426 in the corresponding period last year. Also, by collecting Rs 2,907 crore as excise tax in the first half of the current financial year, Punjab has registered a growth of 18% as compared to the same month last year.
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