Populist Punjab Budget

AN election year is synonymous with a populist Budget. The one presented by Punjab Finance Minister Manpreet Singh Badal is no exception. With the Lok Sabha polls barely two months away, he has predictably avoided burdening the voters with new taxes. After a long delay, the Congress government has decided to rationalise VAT rates on petroleum products to bring these on a par with the charges in the neighbouring states. The consequent reduction of petrol and diesel prices will provide relief not only to the consumers, but also to the fuel station owners who have been suffering heavy losses.

The support of the agrarian community had propelled the Congress to victory in the Hindi heartland states of Rajasthan, Chhattisgarh and Madhya Pradesh last year. The party, which had stormed to power in Punjab in 2017 on the back of the farm loan waiver promise, is continuing with the sop opera despite fiscal constraints. For 2019-20, a sum of Rs 3,000 crore has been allocated for writing off loans of landless farm labourers and the families of farmers who have committed suicide. The decision is obviously aimed at wresting the initiative from the Shiromani Akali Dal, which is going all out to win back its key vote bank. The SAD top brass had recently led a protest march by the kin of deceased farmers and repaid the debt of Budh Singh, the embittered mascot of the Congress’karza maafi scheme. The Capt Amarinder Singh government is banking on this Budget to thwart attempts by the rival party to regain popularity among the farmers.

The higher allocation of funds for agriculture, health and education sectors, besides rural and urban infrastructure, is a welcome step, but the hefty subsidy bill (over Rs 10,000 crore) for providing free power to the farm sector and the industry is a major drain on the exchequer. With the state’s debt burden set to rise by more than Rs 17,000  crore, the government cannot keep blaming its predecessor for the financial mess. What’s needed is a workable road map to mobilise resources, curtail expenditure and ensure better tax compliance.