Monday, January 1, 2001,
Chandigarh, India


M A I N   N E W S

Punjab shortlists priority sectors
By P.P.S. Gill
Tribune News Service

CHANDIGARH, Dec 31 — As Punjab enters the election mode with the dawn of New Year tomorrow, it is time to look ahead.

The New Year will mean a different Budget. Seen in the context of the ground realities, the state is heading for an economic crisis that will not permit the ruling SAD-BJP to make populist announcements. It is time to say goodbye to generous luxuries.

Irrespective of the political outfit which is voted to power, certain basic ground rules will remain the same. These can be ignored by a political party at its own peril as well as that of the state. The most fundamental and predominant is the prevailing “structural imbalance” that will offset any financial planning if correctives are not applied. This imbalance is in regard to salaries, pensions, repayment of interest, loans and market borrowings.

As much as 75 per cent of the state’s tax and non-tax revenue is eaten up by 2 per cent government employees and pensioners.

Preparations for the next Budget have begun both at the administrative and political levels. The Chief Minister, Mr Parkash Singh Badal, has already told the MLAs of the ruling coalition to discuss development-oriented proposals and projects with the Finance Minister, Capt Kanwaljit Singh, whose Principal Secretary, Finance, Mr K.R. Lakhanpal, is engaged in discussions with administrative secretaries.

The MLAs have been asked to “prioritise” development works in their constituencies. The strategy evolved by Mr Badal is simple. At least six priority sectors have been shortlisted on which the government proposes to concentrate while taking up development work in 117-odd constituencies. The selected areas are elementary education, primary health, drinking water, sewage disposal in cities and villages, scavenging and sanitation and roads.

The bottomline is that before the state goes to the polls some visible impact of development projects must be seen and felt. The stark realisation after four years is that spreading the development canvas too wide with only a sprinkling of finance has neither had the desired effect nor may yield dividends by way of votes.

The Finance Department admits such a strategy is workable but adds a word of caution — Punjab may be out of the financial ICU intensive care unit) and not in a coma, but the “sanctity” of the Budget is not being adhered to. The revenue receipt and expenditure figures, as per the 2000-01 Budget, are getting unstuck. The political executive remains vision blind.

Now nine months down the Budget year, there are signs of financial buoyancy as regards sales tax returns. Such a fast recovery will reach a plateau sooner than later. Similar upswings cannot be expected in the years ahead.

The good news, however, is that money-guzzling departments like the Police, Education and Health have restricted their expenses to the Budget figures, seeking no major supplementary demands unlike last year when twice supplementary demands amounting to Rs 1,500 crore were put up.

Incidentally, the state will be in overdraft to the tune of Rs 125 crore on New Year’s Day — the 10th day.

Therefore, what should worry the political executive and bureaucrats is in-service manpower and those getting pension. With better health facilities, the number of pensioners may outstrip the inservice employees, remarked a source. Therefore, the distortion in the structural imbalance increasing every passing year should be of major concern to the any political executive.

The onus of financial planning and dovetailing it with “prioritised” development policies lies as much with the political executive as all legislators. Besides the financial audit, Punjab needs an economic audit as well as propriety audit of development-oriented planning. Development-oriented policies and “prioritisation” are to be driven by “economic” needs and realities and not by politics-driven policies.

Sources in the Finance Department contested the claim of the Minister of Local Government, Mr Balramji Das Tandon, that municipalities were not getting their octroi share from liquor. Against Rs 50 crore, Rs 32 crore has been released and the money assigned by the 10th Finance Commission also given. But a huge backlog cannot be expected to be cleared in one go even in respect of compensation to be paid for land acquisition under the Sutlej Cleaning Project.

The devolution of funds is being done as per the availability to even panchayati raj institutions, sources add.

Therefore, as Punjab prepares for the next Assembly elections and the Budget exercise gets into gear, the political outfits in power or in the Opposition have to understand that the financial crunch is bound to come sooner than later because buoyancy due to tax realisation cannot be permanent nor is increasing taxes a solution.

There is some financial improvement but there is no let-up on committed expenditure which will further rise unless the structural imbalance is corrected. Neither will the fire-fighting approach help nor lack of political will. More than acting as political entities, the leadership has to act as an economic entity to avert the critical situation ahead.

Take the typical case of infrastructure. In fact, Y2K was to be the year of infrastructure development. There is a board for this purpose and a high-powered committee, headed by the Chief Secretary. Through public bonds the board collected Rs 300 crore. It has another Rs 200 crore. The state is sitting pretty over Rs 500 crore, unable to spend or initiate any work on infrastructure projects because of vested political and bureaucratic interests.

If, on the one hand, Punjab is on the threshold of a new millennium, beginning from New Year’s Day, on the other it is perched on the precipice of a critical economic situation. Which political outfit will save it?

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