Punjab State Budget- Not So Rocking!

Devoid of any new taxes and concessions the Punjab budget announced in the Vidhan Sabha proved to be, a not so rocking one after all. In wake of the elections scheduled on 7th April, the finance minister seems to have succumbed to the pressure of politics and populism.

Finance Minister Manpreet Singh Badal, who was presenting the second budget of the Parkash Singh Badal led SAD-BJP government in Vidhan Sabha, proposed a budget with a total size of Rs 31,634.61 crore. This included revenue expenditure of Rs 25,261.20 crore, capital expenditure Rs 3,482.94 crore, public debt repayment Rs 2,446.05 crore and loan and advances Rs 36.95 crore.

The budget plan accords high priority to energy sector, which would account for 35.5 per cent of the approved outlay. The social services sector would form 25.22 per cent of the approved outlay and is the second priority sector. Pensions to old, skill development, employment generation are other key areas in focus.

Agriculture and allied activities would get only 4.87 per cent of the total Annual Plan for next fiscal. However, the finance minister said that the agricultural economy of the state deserves the greatest attention by the government.

He said that, as against an all-India average of over 80 per cent of farmers that are classified as small and marginal farmers, in Punjab only 30 per cent farmers fall in this bracket. The size of land holdings being a determining factor thus precludes a large section of the state's indebted farmers from availing of any substantial benefit from the announced waiver, he added.

The budget however has failed to focus on the ever-increasing financial mess the state is trapped in. Despite recognizing the situation there seems to be no concrete plan to keep the growing debt under control. The state’s debt will rise to Rs 57,369 crore from the present Rs 52,936 crore by the end of the next fiscal. According to the budget figures, every farm household in Punjab is in debt to the tune of Rs 41,576; this is more than three times the national average of Rs. 12,585.

There is no agenda to push growth, which has been and will continue to be below the national average: 5.9 per cent against the national 9 per cent in the 11th Plan period.

The allocations for industry, health and education are much less than what is required. The additional allocation for power will only strengthen the existing infrastructure. There are no funds for new power generation, free power subsidy and even for the purchase of the same. With the government adjusting the power subsidy against loans, the Punjab State Electricity Board has been driven closer to the edge.

What the government seems to have ignored here is that, it is high time now that Punjab puts an end to the regime of non productive spending by the government except for the poor and economically weaker sections of the society. There is no fun of pleasing well to do classes just to get more votes. It is not prudent for the long term future of the state.

State needs to spend more on enhancing the living standard of the masses. As a matter of fact 70 percent of Punjab population is deprived of basic hygienic conditions of standard living.

Resources saved by reducing subsidies can be used to meet these disparities. It is highly unfortunate that political parties in the state do not talk about these problems aloud and are just bluffing.

Punjab needs diversification from agriculture to more and more of industrial activities. Punjab has every potential to become the education and health hub in India. It is time to take proactive action and help Punjab once again reach the pinnacle of growth. Its time to take action soon, before the once most productive state of the nation becomes the most dependent, debt laden state.