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Testing time over, economic revival in sight, says Manpreet

Finance Minister Manpreet Singh Badal, who presented the third Budget for the Amarinder Singh government, spoke with The Tribune correspondent Ruchika M Khanna.

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Finance Minister Manpreet Singh Badal, who presented the third Budget for the Amarinder Singh government, spoke with The Tribune correspondent Ruchika M Khanna. 

“It has taken a long time for me to steer the state’s economy on the growth trajectory, especially after I had inherited a bankrupt economy with unpaid bills worth Rs 7,800 crore,” he said, claiming after several years the state was in primary surplus (if the huge public debt is not taken into account). Excerpts of the interview:

What is the biggest achievement since the last financial year?

I would say fiscal consolidation. We are finally at a stage where the state is in primary surplus, revenue expenditure is under control and we have beaten the targets of fiscal deficit as well as revenue deficit in the ongoing year. This, despite the Rs 3,1000 crore additional burden of food credit account imposed on us by the previous government. We have managed to reduce the debt to Gross State Domestic Product ratio from 42 per cent (2017-18) to 39.74 per cent this year. We also ensured that the number of days the state remained in overdraft and ways and means advances was reduced drastically.

How do you propose to fill this gap of Rs 2,323 crore?

We are on a path of correction. The revenue gap in the first year was Rs 10,000 crore and this year, we are hoping that it will not exceed Rs 2,323 crore. This is because I have factored in unpaid power subsidy from 2018-19. With better tax compliance and cutting down on unproductive expenditure, this will be filled. Also, the 14 per cent year-on-year increase in GST compensation will help boost the economy.

What has been your focus area?

I have tried to address the issues of all sections of the society within the limited fiscal space available to me. We have rationalised VAT to bring petrol and diesel prices, which makes diesel cheapest in Punjab in North India. This will ensure that our VAT collections remain static at Rs 6,300 crore (same as in 2018-19), but it will benefit consumers. At least Rs 3,000 crore has been allocated for loan waiver to landless labourers and families of farmers who committed suicide. 

Why is there no additional resource mobilisation? 

With the GST rollout, the state has almost nil scope to impose new taxes. Last year, we imposed minimal taxes — Punjab development tax and professional tax as it was required to avail loan from Asian Development Bank. This year, we are coming up with an excise policy that will help fill our coffers. 

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