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Punjab Budget: Four out of Five Poll Promises Addressed by AAP Govt., Fiscal Deficit a Major Concern

Dr Gian Singh |
As per the budget, the debt was Rs 2,63,265 crore during 2021-22, estimated to be Rs 2,84,8s70 crore after the current financial year.
punjab budget

The Punjab government of the Aam Aadmi Party (AAP) has presented its first budget in the Assembly. The budgets of the Central and state governments are accounted for in terms of the promises they made to the people before they formed the government after winning the elections, the claims made now, and the new commitments for the future. This is AAP's first government in Punjab.

To win the Punjab Assembly elections, AAP gave guarantees beyond the promises made to the people by other political parties. It would be appropriate to take stock of the first budget of the Punjab Government in relation to the guarantees given by AAP and the solution to the problems faced by the people here.

AAP has given five guarantees of providing (a) high-quality education, (b) high-quality healthcare services, (c) 300 units of free electricity for each family, (c) increased compensation for the families of martyred soldiers, and (h) Rs 1,000/month to all women above the age of 18 years.

AAP has claimed that out of the five guarantees, four guarantees have been fulfilled in this budget. The fifth guarantee is said to be fulfilled soon.

Even if high-quality education does not completely transform a person's life, it guides them in understanding their problems and solving them. In this regard, the announcement of providing free uniforms and books to government school students is commendable as many children in these schools come from low-income families. Out of all the government schools, focusing on building modern digital classrooms in 500 schools and making 100 'eminent schools', it would be better to make efforts to raise the standard of all government schools.

Having an Estate Manager for a cluster of schools can go a long way in improving the performance of government schools. Installing solar panel systems on government schools' roofs can meet these schools' electricity requirements, but the cost involved will have to be managed. No specific announcements were made in this budget regarding raising the education standard in colleges and universities.

Teachers have not been appointed in government colleges in Punjab for the last 25-26 years. The teaching work is being carried out with the help of low-paid guest teachers. There are many teaching vacancies in most of the departments of government universities in Punjab. That is why teaching is being carried out with the help of guest teachers and research scholars. The Punjab government has reduced the grants to these universities to such an extent that there are frequent reports of non-payment of salaries and pensions to the teachers and other staff working here.

In this budget, Rs 200 crore has been earmarked for Punjabi University, Patiala. The former Chief Minister Charanjit Singh Channi had announced taking over the debt of Rs 150 crore and increasing the monthly grant from Rs 9 crore to Rs 20 crore to Punjabi University, Patiala. This announcement was never fulfilled during his tenure as Chief Minister.

The current Rs 200 crore earmarked for Punjabi University, Patiala, needs clarifications. Rs 215 crore had also been allocated for Punjabi University, Patiala in the financial year 2021-22, but Rs.207 crore came for various heads. If the current amount of Rs.200 crore is like the 2021-22 budget, it is Rs 7 crore less than the previous financial year. If this amount is for debt relief of the university, then it must be appreciated. Still, at the same time, it is necessary to increase the monthly grant per the university's requirements. This university provides higher education to the students of rural areas, especially the Malwa region of Punjab.

Students from rural areas generally belong to the lower and middle-income groups. The government also needs to provide financial help to reduce the fees being charged from these students. Apart from providing degree education, universities are conducting research and providing extension work facilities which are contributing to the economic development of the state and the country. Therefore, the Punjab government also must provide financial assistance to the universities for these works.

Healthcare services play a vital role in enhancing and maintaining the efficiency of individuals. The budget calls for the construction of 16 new medical colleges over the next five years and five super speciality hospitals-two in 2024 and three more by 2027. It is not immediately clear whether these medical colleges and super-speciality hospitals would be in the public or private sector. If these colleges and super speciality hospitals are built and run by private institutions, then the common person would not even dream of educating their children and getting treatment in these colleges and hospitals. In this budget, there is a provision for 117 Mohalla Clinics in Punjab, out of which 75 Mohalla Clinics would be operational from August 15, 2022.

While guaranteeing good healthcare services during the elections, it was announced that Mohalla Clinics would be set up for all. As per the data released by the Punjab government on February 10, 2021, there are 12,673 villages and 237 cities and towns in Punjab. When will Mohalla Clinics be operational in all these villages and cities? Primary health centres, hospitals and other healthcare centres in rural and urban areas of Punjab have a severe shortage of infrastructure, doctors, nurses, and other staff, which needs to be addressed on a priority basis.

In this budget, there is a provision to run the 'Farishtey Scheme' on the Delhi pattern, which is commendable. As per this scheme, the entire expenses of treating the victims of road accidents in Punjab would be borne by the Punjab government, and letters of appreciation would be given to those who would help the victims of road accidents reach hospitals.

The announcement to increase the compensation paid to the families of martyr soldiers is highly commendable. Soldiers serve the country while they are alive, and their families need all kinds of help after being martyred for their country.

Regarding the guarantee of a free supply of 300 units of electricity, an explanation has to be given as to who will get this concession. This guarantee seems to allure votes because people did not make such a demand. Providing free electricity was estimated to cost Rs 1,800 crore, which would further increase the deficit budget of Punjab. The scheme has also been announced to be implemented from July 1, 2022.

The AAP budget has not earmarked any amount to fulfil one of five guarantees that all women above 18 years of age in Punjab would be paid Rs 1000/month. This guarantee will also strengthen the vote bank as no group of women in Punjab has ever made such a demand. For the welfare of women, there is an urgent need to provide them with education and employment and stop discrimination against them for being women. Where will the funding be available to meet this guarantee?

The two announcements in this budget regarding providing employment to the people and regularising the services of contract workers are commendable. As per the first provision, 26,454 persons would be freshly recruited, while 36,000 long-term contract workers would be confirmed according to the second provision. Unemployment is high in Punjab, and the quality of employment is very low. Due to these two aspects of employment, many young boys and girls are migrating abroad. This international migration results in brain drain, capital drain, and loss of demographic dividend.

During the 1960s, Punjab played an important role in overcoming the severe food shortage in the country. Since then, Punjab has been the country's leading state in providing food security. In this budget, Rs 11,560 crore has been earmarked for the agriculture sector of Punjab.

This amount includes Rs 6947 crore for providing free electricity to the tube wells, Rs 450 crore for direct sowing of paddy seeds at the rate of Rs 1500/acre, Rs 350 crore for salaries and pensions to the teachers and staff of Punjab Agricultural University, Ludhiana, Rs 175 crore for salaries and pensions of the employees of the Department of Agriculture, and only Rs 66 crore for procurement of corn at Minimum Support Price.

The plight of most farmers, farm labourers, and rural artisans who depend on agriculture for their livelihood remains pitiable. A study conducted on suicides of farmers and farm labourers by three universities in Punjab has revealed that most marginal farmers and farm labourers fall prey to suicides. There is nothing new in the budget to rehabilitate the families of farmers and farm labourers who have committed suicide. The budget does not mention any specific measures to prevent these suicides. The most important reason for these suicides is the ever-increasing debt of these sections. The budget does not mention any debt relief scheme for these sections. Direct sowing of paddy provides Rs 1500/acre to farmers, but there is no provision for relief from the adverse effect on the employment and wage rates of farm labourers. The provision of only Rs 200 crore to prevent the burning of paddy straw seems insignificant.

The debt of the Punjab government is steadily rising. As per this budget, the debt was Rs 2,63,265 crore during 2021-22, estimated to be Rs 2,84,870 crore in 2022-23. Apart from this debt, there is a debt of Rs 55,000 crore of Boards and Corporations and government guarantees of loans of Rs 22,500 crore. The AAP government has borrowed another Rs 8,000 crore in the first three months. The debt of the Punjab government constitutes 45% of the GSDP, indicating the growth of the state's debt towards the spider web.

In the budget for 2022-23, the revenue of the state is estimated at Rs 95,378 crore and expenditure at Rs 1,55.860 crore. These figures paint a grim picture of the fiscal deficit. Punjab is paying interest of Rs 20,122 crore/annum on the debt incurred, and this amount becomes Rs 36,069 crore if the instalments of repayment of loans are considered. If the Central government stops paying the compensation relating to GST from July 1, 2022, it is estimated that the revenue of the Punjab government may come down by Rs 14000-15000 crore. How would this loss in revenue be compensated?

To celebrate the 115th birth anniversary of Shaheed Bhagat Singh, it is commendable to plant 50,000 trees in each Assembly constituency under the scheme of Shaheed-e-Azam Sardar Bhagat Singh Hariawal Lehar. The government can increase employment by hiring one person to take care of 200 trees under MGNREGA. Earmarking Rs 600 crore for MGNREGA is highly commendable.

The change in excise policy by the Punjab government is estimated to result in revenue of Rs 9648 crore. In this regard, it is important to know that due to a writ petition filed in the Punjab and Haryana High Court regarding the excise policy of the Punjab government, nothing can be said for sure about the revenue from excise. Due to this policy, liquor will be available in Punjab at much cheaper rates. Diesel and petrol rates need to be reduced to curb rising prices.

Earmarking of Rs 350 crore for the state-owned PUNSUP is commendable. In this regard, the government should come forward to help the public enterprises of Punjab, especially the Markfed, which would contribute to the state's economic development.

The budget of the Punjab government is silent on cooperative farming. In the beginning, cooperative farming can be initiated on lands acquired due to the redemption of village common lands. Giving one-third of the village panchayat land to dalits, one-third to women and one-third to landless farmers for cooperative farming without charging any rent would increase employment and income for these poor sections. As a result, the levels of living of these poor sections of the rural society would improve.

To increase the revenue of Punjab and control the fiscal deficit, it is very important to set up state corporations for sand and gravel extraction and sale of liquor, as well as make public arrangements for road transport.

The author is a former Professor at the Department of Economics, Punjabi University, Patiala.

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