Tax blow in Punjab

The Badal government has imposed an additional Rs 1,500-crore tax burden on Punjab. It is an unexpected off-budget, mid-year blow that will hurt more than is calculated currently. With agriculture stagnant and industry languishing, the new tax dose will make Punjab a less desirable destination for private investment. Industry goes where taxes are reasonable, competitive, stable and predictable. Electricity will become dearer too, while one keeps hoping Sukhbir Badal's claim of making Punjab power surplus will become a reality one day.  

The idea of providing sewerage and toilets is good but there are other ways of raising money like curbing tax evasion, downsizing government, cutting unproductive expenditure, especially on VIP luxuries, security and travels. A cess is a dedicated tax used for the purpose it is levied. Not so in Punjab, where the government has a history of diverting funds or losing Central funds for want of matching contributions. Besides, the government tries to hide cash from the Consolidated Fund where each rupee spent is cross-checked by the CAG. The cess collection of Rs 1,500 crore a year too will not be open to CAG scrutiny. It can be handed over to Badal for doling out favours to his favourites at “sangat darshans”. Public money is meant for promoting the common good in a planned way. The cess hikes done outside the budget have not been debated. Not that the warring Congressmen could have made a difference. At least the semblance of keeping democratic traditions alive would have been maintained. By Sukhbir Badal's own admission, 140 towns and 12,000 villages in Punjab are without toilets and sewerage. When he boasts of development, the Opposition can remind him of this. 

Costlier diesel will raise prices of all transported commodities people use. Children will have to pay more for going to school. Normally expensive petrol should deter the use of personal cars, which can help in checking air pollution and decongesting roads. But if bus fares rise too, people stick to cars, or given the chaos on roads, opt for luxury buses that the likes of Badals run.