Punjab to seek redevelopment package from finance panel

Ruchika M Khanna

Chandigarh, July 20

The Punjab Government will seek a redevelopment package and revenue deficit grant from the 16th Finance Commission, which is expected to arrive here on Sunday evening.

Other key demands

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• A post-devolution revenue deficit grant, besides funds for fight against narco-terrorism and war against drugs
• Package for industrial development in border areas of the state
• Funds for deployment of police force as second line of defence in border areas
• Higher devolution of funds for the welfare of Dalits and disaster management

The government will not just be seeking a post-devolution revenue deficit grant, but also make pitch for a package to rebuild the state’s ageing road, power and irrigation infrastructure.

The 15th Finance Commission had given Punjab a post-devolution revenue deficit grant of Rs 25,968 crore for five years. The 13th and 14th Finance Commissions had not given that grant to the state.

The state will seek additional funds from the 16th Finance Commission to help it in its fight against narco-terrorism and war against drugs.

A special package for industrial development in border areas will also be sought. Due to the state being located at the International Border with Pakistan, 35 per cent of its police force remains deployed as the second line of defence in border areas. The state government would seek additional funds for the deployment of its police force, said an official source.

With the state having the largest percentage of Dalit population, the government will also seek higher devolution of funds for their welfare. Additional funds for disaster management will also be sought.

The state government is also expected to highlight how its economy is sagging after the GST rollout and the losses caused by the exclusion of cesses and surcharges, after most state taxes were subsumed.

But the commission’s visit this time is being met with some scepticism, especially in the wake of the Centre holding back Punjab’s Rs 9,770-crore dues following disagreement with the state’s Aam Aadmi Party government on the implementation of various central schemes.

The state government is also apprehensive that it will be under pressure to have a relook at its power subsidy to both agriculture and domestic consumers, before seeking any economic package.

The total power subsidy bill of the state for the ongoing fiscal is Rs 21,909 crore, which the state government will project as its social spending in a welfare state. The government will also maintain that the subsidy to the agricultural sector is being given so that Punjab continues to produce paddy for the nation’s food security.

Interestingly, neighbouring Himachal Pradesh decided to do away with power subsidy to taxpayers earlier this month. That was done after the visit of the 16th Finance Commission to the hill state, which had flagged the issue of subsidies being given by states in spite of their poor fiscal health.

The six-member team of the commission, led by its Chairman Arvind Panagariya, is expected to hold discussions with the state government’s political and executive functionaries on Monday, besides leaders of Opposition parties. The team will then visit Amritsar for a day and meet representatives of trade and industry.