Revenue loss huge, may freeze capital expense: Punjab Finance Minister

Finance Minister Manpreet Singh Badal considers Punjab, which is staring at huge losses amid pandemic, as a major agri-powerhouse with some meaningful agricultural activities taking place. In an interaction with The Tribune correspondent Vijay C Roy, he said the losses would be heavier in other states such as Telangana, Andhra Pradesh and Maharashtra, which are totally dependent on services and industrial production as compared to Punjab. The excerpts:

To what extent, lockdown has affected the state’s economy?

We are losing about Rs150-Rs160 crore a day in terms of tax revenue. Besides, our electricity board is losing about Rs25-30 crore a day. This means the loss is Rs6,000 crore a month.

Will you be able to achieve the budgeted revenue collection this fiscal? What kind of shortfall you foresee?

Even as Punjab is going to open now, the supply has been ruptured. It will take a minimum of six months for it to be restored. Secondly, there is a worry over demand. Many people have lost their livelihood. I fear that demand will be absolutely flat for some time. We might even see a negative trend. In the first quarter, we might end up losing about Rs7,000 crore in tax revenue. Even if we limp along in the next three quarters, the total loss will be around Rs18,000-Rs20,000 crore this fiscal.

How are you planning to cope with the revenue shortfall?

We might defer capital expenditure for the next fiscal, which would be around Rs10,000 crore for the current year, although I am aware that if no capital expenditure takes place, it affects the quality of governance. You can’t bring the state to a standstill. On the positive side, Punjab is a major agri-powerhouse where some meaningful agricultural activities are taking place.

Will the state raise duties such as VAT on petrol and diesel, and excise on alcohol?

It’s a double-edged sword. You can have more money by increasing the petrol prices, but it will be like rubbing salt on the wounds of people who are already suffering. I have to strike a balance. It is tempting, but it won’t be good for MSMEs too.

What kind of stimulus package are you expecting from the Centre?

I am not sure how much the Centre will be able to put through because it is also in a bad shape. It may come up with a lakh and a half crore for the industrial sector, besides offering cheaper credit. I think its hands are also tied and it can’t go beyond a certain point.

What steps could be taken for supporting labourers and workers in small-scale industries?

We want to open e-commerce to realise the full potential of the small industry. Secondly, we need to have quick policy on getting migrants back. Anticipating manpower need in different sectors, we must publicise the available work. We have to get out of no-production cycle. For this, we need to take steps to restore supply and demand disruption.

What lessons are to be learnt from this pandemic?

I think not only Punjab, but the entire nation needs to reposition itself in key sectors like pharmacy and pesticides, where China has a complete hold. Besides, we need to give a big push to digital education, entertainment and medical services. We also need to automate government functioning and focus on ease of doing business.