Thursday, June 20, 2002, Chandigarh, India

National Capital Region--Delhi


M A I N   N E W S

Petrol to cost more in Punjab
LTC, DA to staff frozen; Budget to net Rs 1000 cr
P.P.S. Gill
Tribune News Service

Chandigarh, June 19
The first Congress Budget, presented by the Punjab Finance Minister, Mr Lal Singh, in the Vidhan Sabha today, will fetch the government a revenue of Rs 1,000 crore.

Besides the imposition of Re 1 cess per litre on petrol and proposed toll tax the Budget proposals include a series of steps that will hit the employees hard across the board and make traders shell out more. The steps pertaining to employees are likely to result in saving of about Rs 500 crore, whereas, mobilisation of Sales Tax will fetch Rs 3,250 crore during the year. Together, petrol and toll tax are expected to yield a revenue of Rs 120 crore approximately .

The steps to achieve fiscal discipline and revenue include restructuring of all major departments and identifying “redundant staff’’ and shifting it to a surplus pool and re-deploying, as per requirement. A voluntary retirement scheme is to be introduced shortly. The other steps are:

1. Future employment would be scheme/project specific and terminated with the completion of the same. 2. For future employees, a new pension scheme based on defined contributions would be evolved. 3. There will be complete ban on foreign tours of ministers and officers. 4. The facility of LTC would be frozen, except for employees, who are retiring in the current block. Same way, the payment of dearness allowance due from July 1, 2002 to June 20, 2003, is to be frozen. 5. Pay and allowances of the public sector undertaking employees of corresponding category to be aligned with that of government employees. 6. The cadre strength of various all-India services to be strictly fixed, as per approval accorded by New Delhi and excess to be adjusted in future vacancies. 7. Security cover of the Chief Minister to be reduced by one-third and other VIPs to be given security, selectively. While, the vehicle strength with ministers to be reduced by one each and for departments and PSUs to two each. 8. Perquisites like provision of house etc to ex-Chief Ministers withdrawn. 9. Leave encashment, non-practicing allowance, formula for commutation of pension etc to be reviewed. 10. Medical reimbursement to be replaced by medical insurance.

This becomes evident form the Rs 693.72 crore deficit budget for 2002-03. The total budget is for Rs 26,173.49 crore, as against Rs 24,919.09 crore last year. The deficit on revenue account is estimated at Rs 3,494.62 crore in the current year, as against Rs 3,842 crore for 2001-02.

Important indicators of the Budget show that against Rs (-) 5,257.13 crore gross fiscal deficit last year, it will be Rs (-) 5,446.76 crore by March 31, 2003, as per the budget estimates.

The Budget attempts to face the fiscal crisis boldly and unfold the road map to reforms across all sectors of economy. It includes administrative reforms, resuscitating agriculture and industry, as per World Trade Organisation regime requirements, trimming wasteful expenditure, introducing concept of fiscal responsibility and Budget management.

The Budget, besides other sectors of economy, lays great stress on social emancipation, education, health, empowerment of panchyati raj institutions and municipalities, as per 73rd and 74th Constitution amendments, dalit habitats, urban and infrastructure development. The Budget is framed in a manner as to attract institutional finance from within and outside the country.

Where it spells out measures to implement the reforms in the current year, it also includes a ‘’medium-term fiscal plan’’ to impart continuity, consistency and transparency to the exercise of budget formulation.

The resource-based annual plan for 2002-03 is pegged at Rs 2,793 crore, against the available resources of Rs 1,950 crore. A resource gap of Rs 843 crore will be more than met with the generation of additional resources and improvement in the financial position of the state electricity board consequent upon the implementation of the proposals outlined by the Minister.

Mr Lal Singh, aware of the likely reaction of employees added, ‘’I do realise that some of the proposed measures would be perceived, as harsh towards employees. However, in the face of the fiscal crisis being faced by the government, there is no escape form such measures’’.

The other measures include rationalisation of tariff, improving operational efficiency and providing requisite budgetary support to Punjab state electricity board. The government is waiting for the Tariff Order of the Punjab State Electricity Regulatory Commission. It was later explained that the Tariff Order was not mandatory to be followed by the government. But if while making amendments in the same, the board was to suffer losses, the government has to compensate the same from its Budget. From all available indications, ‘’free power’’ to tube wells, ‘’free’’ irrigation water etc, will be eventually withdrawn.

The state will impose ‘’user charges’’ for transport, drinking and irrigation water, sewerage, technical, medical and higher education, secondary and tertiary health care and also improve quality of services. The user charges are to be so revised upwards, to recover cost of operation and maintenance of the same.

The regime of sales tax will be restructured with computerised monitoring. The measures are mooted keeping in view the prevailing low Sales Tax GDP ratio in Punjab. It is the lowest in the country.

It would be done through net-working, withdrawal of Sales Tax incentives, abolition of surcharge on automobiles, shifting of certain direct consumption steel items to the first stage of taxation, fully conforming to the national consensus for floor rates of Sales Tax and introduction of EXIM form.

Though the state expects Sales Tax returns worth Rs 3,250 crore during the year it has targeted the growth at Rs 5,000 crore, per annum, after four, five years.

For the first time, the state budget has introduced the concept that power to grant exemption from Sales Tax through executive instructions would henceforth vest in the Vidhan Sabha.

There is a proposal to revise the floor value of properties for levying stamp duty, plug leakages of duty by transfers through general power of attorney and withdrawal of non-merit exemptions from stamp duty. It would yield Rs 525 crore. There exists a potential for this to go up to Rs 1,000 crore, per year, in four, five years.

By plugging evasion of Motor Vehicle Tax, the current year revenue is expected to be around Rs 350 crore, as compared to Rs 318 crore last year. Progressive privatisation of the Punjab Roadways and the PRTC is on the anvil.

There is a major move on dis-investment in the public sector undertakings because there is no return, despite heavy investment of Rs 8,234 crore. The dis-investment will be on ‘’fast-track’’ and beginning will be from Punjab the Communications Limited, the Punjab Alkalies and Chemicals, the Punjab Tourism Development Corporation, and the Conwire and PSIDC’s holding in the Punjab Tractors Limited.

For agriculture there will be a research and development board. To begin with, village panchayats would be given powers to supervise the attendance in elementary schools and health institutions catering to the primary healthcare. Ultimately, the government is committed to transfer elementary education and primary health care to the Panchyati Raj institutions.

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