New DelhiOutstanding debt in Punjab is expected to increase to Rs 2.85 lakh crore in 2022-23, an increase of 8.4 per cent over the previous year. This means that on an average, per capita loans for every resident of Punjab are likely to increase by Rs 94,000 to Rs 1.01 lakh – an increase of over Rs 7,700 per person.
This is what the first budget presented by the Aam Aadmi Party (AAP) government of Punjab on Monday shows.
Finance Minister Harpal Singh Cheema’s budget speech emphasized on reducing mounting debt, increasing the state’s own tax revenue and fulfilling election promises, but did not provide a definitive roadmap for fiscal deficit consolidation.
While the overall debt as a percentage of Gross State Domestic Product (GSDP) is expected to fall to 45.23 per cent, the government has projected a higher fiscal deficit of 3.78 per cent in 2022-23 as compared to 3.54 per cent of GSDP. Last year.
“The focus areas for the first year will be to restore deteriorating financial health and reduce mounting debt by increasing our own revenues, fulfilling the promise of ‘good governance’ and focusing on the two foundations of any society – health and Education,” the finance minister said in his budget speech.
The government reiterated its commitment to provide 300 units of free electricity monthly to all from July 1, taking the total electricity subsidy bill to Rs 15,845 crore – an increase of 18 per cent over the previous year and nearly 64 per cent more than the subsidy. Provided in 2020-21.
However, there was no reference in the budget speech to fulfill the promise of providing an allowance of Rs 1,000 for every woman above the age of 18 years.
14 percent growth in total spending since FY22
The government aims to spend a total of Rs 1,55,860 crore in 2022-23, an increase of 14.2 per cent over the previous year. This expenditure, mostly devoted to health, education and agriculture, accounts for 25 per cent of the state’s GDP.
However, 30 per cent of the total expenditure – Rs 46,317 crore – will go towards salaries and pensions of state government employees, who saw their salaries increase with Punjab’s implementation last year. 6th pay commission recommendations.
The government is expected to spend about 15 per cent of its budget, or Rs 23,498 crore, on infrastructure construction and maintenance of existing roads, bridges and buildings, including government schools.
The health budget is expected to increase by 23.8 per cent over the previous fiscal to Rs 4,731 crore, with a focus on setting up new initiatives. Street either lump Clinics to decentralize public health services.
“seventy-five of these” Street The clinics will start operating by August 15, 2022,” Cheema said.
The government said it would spend Rs 10,981 crore on capital formation in 2022-23, which is 9 per cent higher than the previous year. However, the allocation for capital expenditure is only 7 per cent of the total expenditure for 2022-23, while the Center spends about 19 per cent of its total target on capital formation.
This is mostly because in the last five years ending March 2022, the state’s own tax revenue has declined from 71.82 per cent to 47.79 per cent of the total revenue, indicating a decline in Punjab’s ability to mobilize resources internally and Indicates dependency on transfers. hub.
In the same period, the total outstanding debt of Punjab has increased by 44.23 percent to Rs 2.63 lakh crore at the end of 2021-22. Total debt is expected to increase to Rs 2.85 lakh crore or 45.23 per cent of GSDP in the current year.
In the current year, the state expects its GSDP to grow by 9.8 per cent to Rs 6.3 lakh crore.
Where will the money come from for the increased expenditure?
According to budget documents, at least 20 per cent of the total expenditure in Punjab will be funded through loans from banks and other financial institutions. About 30 percent will be funded through the state’s own tax revenue, and the rest will come from the Center through grants and other transfers.
While the state’s own tax revenue is likely to increase by 20 per cent to Rs 45,588 crore in the current year, the total revenue is likely to see a growth of 18 per cent over the previous year.
Without announcing any new tax, the finance minister said the government would have a new “game-changer” excise policy that would break the monopoly that developed in the sector over time.
“We are expecting an increase of Rs 9,648 crore in our excise duty, which will be a massive 56 per cent growth in FY 2021-22,” Cheema said.
Earlier this month, the government implemented the excise policy for 2022-23, thereby alcohol cheap Up to 35-60 percent. Under the policy, there will no longer be a “quota” for selling beer and Made in India Foreign Liquor (IMFL). Here a quota refers to the fixed quantity of liquor that the supplier can buy from the open market during a specified period.
The Finance Minister said the buoyancy in Goods and Services Tax (GST) collections would fetch the state a revenue of about Rs 20,550 crore, which is about 27 per cent more than the previous year.
Cheema also announced the creation of a Tax Intelligence Unit aimed at helping the Finance Department improve tax compliance under GST.
The government expects the revenue deficit to be 1.99 per cent in 2022-23, from 3.66 per cent last year and 3.27 per cent in 2020-21. Comparative figures may vary at the end of the year as there is usually a wide gap between the revenue estimates of Punjab and the actual amount collected.
(Edited by Aswari Singh)
read also, Cheap Liquor, More Revenue – Why Punjab’s New Excise Policy Is a ‘Batt-Bal-Balte’ Step for the State