Govt to cut revenue expenditure by 20%

Ruchika M Khanna

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Tribune News Service

Chandigarh, January 7

The cash-strapped state government has imposed a 20-per cent cut in standard object of expenditure (SOE) of the revenue budget, keeping aside salaries and pensions, with immediate effect.

From now on, the only expenditure the state government will make is on its committed liabilities — debt servicing, payment of water and power bills, besides paying salaries and pensions of its staff. In order to improve the “precarious” fiscal health of the state, it has also been decided not to procure any goods or allocate any tenders for new development works for the remaining part of this financial year.

Only the ongoing works are to be completed and money will be released for the same.

These are the latest directions issued by the Finance Department to all heads of departments in the state government, Commissioners, Deputy Commissioners, Sessions Judges and even the Registrar of the Punjab and Haryana High Court. The directions issued today mention that these have the sanction of the Chief Minister.

The state government has also decided that in case of any emergency or urgency for procuring any goods or starting a new project, an approval of the Finance Department will have to be taken.

These decisions have been taken in the wake of dismal revenue collections through taxes and non-taxes and the rather slow release of the GST by the Government of India. Over Rs 3,000 crore is due to be released by the GoI as GST compensation (for October-November). The second instalment for December-January will be due by month-end. On the other hand, whatever amount that the state has borrowed so far this year (till November), it has been used to repay the interest on the loans taken by the government. Punjab borrowed Rs 8,212.92 crore till November and paid Rs 8,202.86 crore.

A look at the latest fiscal indicators reveals that the revenue deficit has already touched Rs 6,706.36 crore. On the other hand, the state has neither been able to give dearness allowance (two instalments) to its employees nor release their arrears for 105 months. Power subsidy of over Rs 5,000 crore, too, has not been paid to the Punjab State Power Corporation.

Other than the above stated measures, cuts in salaries of doctors (non-practising allowance) and police officials, up to the rank of Inspector (13th salary in a year), are also proposed to curb the burgeoning expenditure.