Punjab Budget: GDP set to grow at 6.76% in 2021-22

Tribune News Service

Vijay C Roy

Chandigarh, June 27

After contracting in 2020-21 by 3.83%, Punjab’s economy is expected to witness real GDP expansion of 6.76% in 2021-22 (advance estimates) against at all-India level of 8.8 per cent. This implies the state’s overall economic activity has recovered from the pre-pandemic levels.

Compared to Punjab, the national economy recovered faster after suffering setback in 2020-21 (quick estimates) as it contracted by -6.6%.

According to the Economic Survey 2021-22, due to repeated waves of Covid-19, the past two years have been difficult for the economy. Almost all indicators show the economic impact of the “second wave” was much less than what was experienced during the full lockdown phase in 2020-21, even though the health impact was more severe.

Rs 6,336 cr for urban development

The government has made an allocation of Rs 6,336 crore for urban development. One of the focus areas will be the development of Ludhiana, Amritsar, Jalandhar and Sultanpur Lodhi under the Smart Cities Mission. An allocation of Rs 1,131 crore has been proposed for the purpose. Under AMRUT, Rs 2,785 crore has been allocated for the development of 16 towns.

State invites Tata to upskill youth

For upskill of state youth, the government has invited Tata Technologies (TTL), along with global industry partners and Lamrin Tech Skills University (LTSU), to set up a common facility for electric vehicles (EVs) in the state. This will go a long way in developing the skills required in the upcoming field of EV segment, the government has said.

First paperless Budget

The government presented a paperless Budget for the first time. The Budget and other documents were uploaded on a mobile app. Initially, there were some glitches as the speech was uploaded on the app 15 minutes after the Budget presentation had started. This was called out by Sukhpal Khaira, following which copies of figures talked of in the Budget were distributed.

Although the agriculture and allied sector has been least impacted by the pandemic, it is expected to grow by 1.39% in 2021-22(A) after growing by 3.06% in the previous year (2020-21(Q)).

The sector is a source of livelihood for 26% of the working population, slightly less than the sector’s share in Punjab’s Gross State Value Added (GSVA). This is a result of high levels of mechanisms of agriculture practices in the state. The agriculture sector drives the growth in the economy and it leads to overall higher growth.

According to the survey, in contrast to slow but steady performance of the primary sector, the industrial sector went through a big swing by first contracting by 2.11% in 2020-21 and now likely to expand by 6.92% as per advance estimates of 2021-22.

The services sector accounts for almost half of the Punjab’s economy and was the most impacted by the pandemic restrictions, especially for activities that need human contact. Although the overall sector first contracted by -4.91% in 2020-21, it is estimated to grow by 8.12% in 2021-22, because there is a wide dispersion of performance by different subsectors.

Financial services, real estates and the public administration sectors are now well above the pre-Covid levels. However, sectors like trade and hotels are yet to fully recover. As a result, the advance estimates for 2021-22 indicate a decrease in the share of the services sector in Punjab’s GSVA to 46.7% in 2021-22(A) from 47.4% in 2019-20(P). Gross value added (GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy.

Expertspeak

All-round growth

Allocation of Rs 100 crore for industrial focal points & Rs 100 crore for disbursement of fiscal incentives to industrial units under various industrial policies is a welcome step. It will ensure handholding of MSMEs and revival of economy. — RS Sachdeva, Chair, Punjab Chapter, PHD Chamber

Tax Intel Unit unwelcome

There is a bid to divide trade and industry by announcing traders’ commission. The government has tried to threaten the industry by announcing Tax Intelligence Unit. It will enhance corruption and create panic among traders. — Badish Jindal, chief, All Industries & Trade Forum

Booster for health education

The proposal to set up 16 medical colleges means that more seats will be available for medical students. The establishment of a medical college in Sangrur district will strengthen the healthcare system. — Karan Gilhotra, Co-Chair, Pb Chapter, PHD Chamber

QUICK NOTES

Rs 1,264 cr for jobs, skill development

The AAP government has allocated Rs 1,264 crore for job generation and skill development. An outlay of Rs 714 crore has been proposed to fill 26,454 government posts. Of these, 10,000 posts will be offered in the Police Department. An additional provision of Rs 540 crore has been proposed for providing 36,000 contractual employees with regular jobs.

Fintech City proposed near Mohali

The government has proposed to a Fintech City near Mohali where all facilities would be provided to encourage private participation in areas such as fintech, block-chain technology and artificial intelligence. To promote industrial revival, unutilised land in underdeveloped industrial estates and focal points will be made available to the industry.

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