Mopping up resources an uphill task

Ruchika M Khanna

Chandigarh, March 9

Mopping up additional revenue for the cash-strapped Punjab will be the biggest challenge for Finance Minister Harpal Cheema, who will present the Budget proposals for 2023-24 on Friday.

Even as experts and his own party have mandated that social development should be the prime focus, rising expenditure and shrinking income sources may act as a deterrent. Burdened by a burgeoning power subsidy, rising salary bill, unpaid dearness allowance and end of the GST compensation would give little legroom to the AAP government.

Despite this, the Bhagwant Mann government is looking to expand mohalla clinics, build schools of eminence, offer MSP on some crops to boost diversification and announce agriculture insurance scheme. A push for capital building is also expected, considering the low capital expenditure this year (just 34.16 per cent of the target).

The government is also mulling to come up with a voluntary scheme to give up power subsidy which is set to cross Rs 20,000 crore against a target of Rs 15,845 crore this fiscal.

The government will be presenting its performance in managing the state of finances. A look at the fiscal indicators for this year, April to January, does not present a robust picture.

In 10 months of this financial year, the state government was able to mop up 69.28 per cent of its targeted revenue receipts. Though the revenue receipts are higher than the receipts during the same period in the last fiscal, the revenue deficit (April-January) has far exceeded its target.

Pramod Kumar, Director, Institute for Development and Communication, said, “The Budget may create four dedicated funds, including for diversification of economy, give impetus to modern small-scale industrial complex and a dedicated rail freight corridor.”

Other funds could be for strengthening secondary and tertiary healthcare; new sources of growth to promote knowledge hub; and for social upliftment for rural indebtedness, promoting employability and tackling drug abuse, he said.

Ranjit Singh Ghuman, Professor of Eminence (economics), GNDU, said, “Punjab is witnessing low-growth-syndrome for the past four decades. The topmost priority should be to increase investment and prepare a roadmap to bring outstanding debt within safe limits. This will require augmenting consolidated fund, minimising revenue deficit, rationalising freebies, subsidies and discretionary spending. There is a huge scope to mobilise additional financial resources.”

Economist Jatinder Singh Bedi said, “Salaries, pensions and interest account for 55 per cent of the total expenditure. Subsidies should be curtailed. The urban and rural development plan should be given push.”