M A I N   N E W S

Manpreet treads cautiously
No fresh taxes in Punjab; duty on power up by 3 pc
Prabhjot Singh
Tribune News Service

Chandigarh, March 16
In presenting a virtual tax-free Rs 3787.73-crore deficit Budget, Punjab Finance Minister Manpreet Singh Badal says that in spite of best of efforts at debt management, an inadequate support from the Centre is making the state struggle with mounting debt burden.

The only channel of resource mobilisation proposed by him has been raising electricity duty by 3 per cent to generate an additional Rs 270 crore. The rest of the deficit, he says, would be met by improved tax collections.

He also indirectly referred to the Sukhbir-Kalia Committee saying additional resource mobilisation measures carried out during the current financial year were likely to yield an additional revenue of Rs 1,930 crore with another Rs 700 crore for local bodies.

Ruling out any new taxes later, he said tax should not be viewed as a burden but as a duty of every citizen to contribute towards improvement in infrastructure and basic amenities.

In his fourth Budget, Manpreet has made increased allocations for power, agriculture, education, healthcare, infrastructure and conservation of environment.

He has allocated Rs 110 crore for roads, Rs 906 crore for infrastructure by the PIDB, Rs 3,300 crore for power, Rs 645.27 crore for irrigation and flood control and Rs 598.43 crore for general education.

The total debt of the state was expected to reach Rs 64,924 crore by the end of the current fiscal year. The liability of servicing this debt was also increasing in tandem. Interest payments pre-empted Rs 4,902 crore in 2008-09 and Rs 5,764 crore in 2009-10. “Worst is over as far as state financ es are concerned. For next four years, we will be on the road to recovery and meet all stipulations of the Finance Commission,” the Finance Minister said. Manpreet said requests to the 13th Finance Commission either to write off or to reschedule some of th e debt were turned down and that “has immensely disappointed us”.

“The state government had submitted a detailed memorandum to the commission conveying to it its views on the specific terms of reference. However, these were overlooked. The state had presented a forceful case on the dwindling share of the states in the Union taxes and duties that are devolved to the states. Punjab wanted the commission to meet at least 50 per cent of the expenditure on the implementation of the Pay Commission recommendation s and to take cognisance of the expected revenue deficits of pay revision. The state also wanted the commission to provide Rs 12,743 crore as 90 per cent of the cost of maintenance, repair, deepening, widening and expansion of water resources infrastructur e in the state to facilitate higher foodgrain production and consequently reduce the nation’s dependence on imports,” he said.

The commission, however, marginally increased the state’s share in Central taxes to 32 per cent against 30.5 per cent under the 12th Finance Commission. The devolution of Central taxes recommended by the commission is not commensurate with the responsibilities and development needs of the state. The distribution of shareable taxes between the states also continues to be governed by considerations of equity rather than efficiency and good performance. The state’s share in the divisible pool of taxes has just increased from 1.299 per cent under the previous commission to 1.389 per cent under the 13th Finance Commission. The state’s sh are in service tax increased from 1.316 per cent to 1.411 per cent.

Scientists have expressed concern that higher temperatures recorded in February and March may adversely affect rabi crops in Punjab. Similarly, lower rainfall in July and August may affec t the kharif crops. The state government in cooperation with Punjab Agriculture University will launch a mission for climate resilient agriculture. An outlay of Rs 10 crore for research and development has been earmarked for this purpose.

The Finance Mini ster said reduced availability of water in the future had been a matter of great concern. Water usage in agriculture needed to be minimised. “We will focus on efficient use of irrigation water by improving the irrigation distribution system, expanding the coverage of micro irrigation systems. The state government is also launching a Punjab river-cleaning plan that will target the treatment of wastewater in all cities of Punjab. It will ensure that treated waste water in urban areas, at present only about 45 per cent of the total discharge will increase to more than 80 per cent by 2012. All major towns discharging water in the Sutlej and Ghaggar will be covered under the action plan. This will also increase the availability of treated recycled water fit for irrigation purposes.”



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