Tuesday, April 2, 2002, Chandigarh, India


M A I N   N E W S

Govt resorting to ‘half-truths’
Kanwaljit apprehends heavy dose of taxes
Tribune News Service

Chandigarh, April 1
Demolishing brick by brick the “negative picture painted by the Congress government about the economic growth of the state” during the five years of SAD-BJP rule in Punjab, the former Finance Minister, Capt Kanwaljit Singh, said today the government was resorting to half-truths to pave the way for administering a heavy dose of taxes.

Warning the government against the levying of fresh taxes, he said the Shiromani Akali Dal would stoutly oppose this. The SAD-BJP government ran the state for five years without levying any tax. Instead people were given relief totalling Rs 1,000 crore through tax concessions.

The SAD-BJP slashed the non-plan expenditure by taking strict measures and brought down the growth in the size of government to 1.83 per cent which was 6.06 per cent from 1991-92 to 1996-97. The increase in the number of employees during SAD-BJP rule was only 2,240 while it was 79,494 from 1984 to 1997 (most of this period pertained to the Congress and President’s rule).

He said the government should further curtail such expenditure and improve its tax collection management instead of following the path of taxing people which was the easiest method often suggested by the bureaucracy.

The previous SAD-BJP government effected a record increase of 33.74 per cent in sales tax revenue while its growth was negative ( minus 1.02 per cent) in1995-96 when the Congress was in power.

The state faced no major financial problem. But the Congress government, within a month of its taking over, had started raising a “hue and cry” about the state’s fiscal position, he added.

The Congress government had informally taken a decision to levy octroi, withdraw the facility of free power to the agricultural sector and effect a sharp increase in the power tariff, he asserted.

“On assuming office, it is generally expected from the new government that it will make known its programme for the welfare and prosperity of the state and the policies to be adopted for the improvement in governance. But even after a month of the formation of the Congress government, it is silent in this regard”, said Capt Kanwaljit Singh.

The scenario that had unfolded in the past one month indicated the bankruptcy of thought, action and determination to perform by the present government. The Government was finding excuses and alibis and laying the blame on others to “wriggle out of its sheer non-performance”. The White Paper placed on the table of the Punjab Vidhan Sabha on March 25 by the government was the beginning of a series of such steps, added Capt Kanwaljit Singh.

There was nothing original in the White Paper. It was only a copy of the preliminary report submitted in January, 2002, by the Punjab Expenditure Reforms Commission. “I had proposed the constitution of this commission in my Budget speech for 2001-2002 and it was set up to suggest the appropriate measures for improving the fiscal position and compression of the non-Plan expenditure.”

The Congress government was criticising the previous SAD-BJP government for granting concessions to various sections while it had promised concessions to the tune of Rs 1,200 crore to people in its election manifesto. All this showed the double standards of the Congress, he added.

He said during the tenure of the previous government, the per capita net state domestic product had gone up from Rs 13,705 crore to Rs 15,390 crore in 2000-01 and the state’s domestic capital formation by industry was for the first time above the national average during the period. The state also achieved a higher growth rate than the national average in 1999-2000 and the following year in the average annual compound growth rate of state domestic product.

Explaining the issue of debt, he said it was wrong to say that the debt trap was fast becoming narrow and deadly. The state government itself could not raise loans from the market. These were allowed under a well-defined policy of the Union Government. The state government got a share of the small savings collected in the states.

Market borrowings were allowed within the overall limit fixed by the Reserve Bank of India. At the end of 2000-2001 the state’s total debt was Rs 27,830 crore, which included loans against small savings collections, central assistance for the Plan (loan portion) and the employees’ provident fund.

He said the revenue deficit showed a sharp increase primarily because of the additionality of expenditure consequent to the payment of Rs 1,500 crore to employees as part of the implementation of the pay commission report. It was brought down to Rs 2335.97 crore in 2000-2001 from Rs 2727.41 crore in the previous year.

There was an increase worth Rs 7,000 crore in the production of foodgrains.The investment in the small-scale industrial sector went up to Rs 392 crore (per year) during the period of the previous government from Rs 143 crore during the tenure of the predecessor Congress government.

New projects worth Rs 19,000 crore were brought to the state in the large-scale industrial sector. There was development of information technology and the Punjab Infrastructure Development Board took up projects worth Rs 725 crore to provide road network of world standards. He listed many other achievements under SAD-BJP rule on this front.


Punjab’s economic growth from 1996-97 to 2000-01
(Badal government’s period)

— Sales tax revenue increased from Rs 1264.50 crore to Rs 2644.41 crore (from -1.02 per cent to 33.74 per cent)

— Tax and non-tax revenue went up from Rs 4457.60 crore to Rs 8399.72 crore (from 3.16 per cent to 24.08 per cent)

— Small savings collections increased from Rs 950 crore to Rs 3,500 crore and the income from lotteries increased from Rs 6 crore to Rs 70 crore

— Power generation rose from 18455.32 kw to 22562.73 kw

— Rise in foodgrain production: wheat from 1,36,72,000 tonnes to 1,55,51,000 tonnes, paddy from 73,34,000 tonnes to 1,37,31,000 tonnes and sugarcane from 1,02,2000 tonnes to 7,77,0000 tonnes.

— Infrastructure development projects worth Rs 752 crore under implementation

— Construction of link roads (about 18,448 km) at a cost of Rs 860.23 crore.

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