Follow Us
Ruchika M Khanna
Economics is often sacrificed at the altar of politics. The past two years of the Congress government have proved that. Despite the intent to turn the state’s fiscal health around, affirmative action has been missing.
By the year-end, the state’s outstanding debt will increase by Rs 34, 459. 09 crore and interest payment on loans by Rs 977.58 crore. Fiscal deficit will rise from Rs 12,494.19 crore (in 2017) to Rs 19,657.87 crore and revenue deficit from Rs 9,455.27 crore to Rs 11,687.26 crore.
In lay man’s terms, the state's committed liabilities are rising — be it salaries, pension, retirement benefits or power subsidy. The Food Credit legacy debt too is pulling the economy down. So is the GST which is lower than anticipated.
In the first year of its tenure, the government did not impose new taxes. In the second, it introduced two taxes — Punjab Development Tax and Punjab Social Security Tax. However, tax collection started much later and was far less than targeted. This year, with the General Election round the corner, the government preferred vote politics to economics. No fresh taxes were imposed.
The government admits there is a resource gap and outstanding liabilities like unpaid power subsidy to be carried forward to the next fiscal year. But there is no road map on how the this gap is to be filled.
Excise collections (from sale of liquor) have fallen. There is virtually no earning from the leasing of sand and gravel quarries. Stamp duty collections are lower than estimated because of the downturn in the realty sector. To give the Congress its due, new investment has started coming to the state.
Having promised the moon to voters, the Congress government is duty-bound to honour its promises, including that of providing jobs. It needs to pull its act together to give thea final push to revive economy.