With total outstanding debt and contingent liabilities of over Rs.2 lakh Crore, cash-strapped Punjab government is hoping to turn the crunch around with the help of increased revenues following introduction of the Goods and Services Tax (GST) from 1 July.
Introducing the maiden budget (2017-18) of newly elected Captain Amarinder Singh government in the Punjab Assembly, state finance minister, Manpreet Singh Badal, said as Punjab's revenue will grow at guaranteed rate of 14 per cent for next five years, state's revenues will double during the period.
Portraying grim picture of state's economy, Badal said as of 31 March 2017, the total outstanding debt of the state was Rs.1,86,618 Crore including the informal debt of Rs.4,435 Crore which has been raised by the state government through various agencies without the approval of Union government.
The total outstanding debt and contingent liabilities, thus, comes to Rs.2,07,226 Crore which is 403.38 per cent of revenue receipts for 2016-17 at Rs.51,371.79 Crore.
The debt servicing (principal + interest) for 2017-18 is a whopping Rs.22,396 Crore against a net borrowing limit of Rs.12,819 Crore approved by Union government for financial year 2017-18. This leaves absolutely no room for the state to invest the borrowed money into development and build resource generating Capital assets, the minister said.
"Our problems are critical. The tide is unfavourable. My optimism and faith lies in one of the biggest tax reforms in our country's history which is the introduction of GST from 1 July, 2017. Experts have opined that Punjab being a consumption state stands to gain by this destination based tax," Badal said.
In the budget, the finance minister announced a 66 per cent increase in agriculture sector spending, increasing the outlay from Rs.6,383.01 Crore to Rs.10,580.99 Crore. The state government also increased social security pension from Rs.500 per month to Rs.750 per month to all categories of beneficiaries.
Badal also announced a hike of Rs.4,000 in compensation for crop damage from Rs.8,000 per acre to Rs.12,000 per acre.
The government has also increased the reservation for Scheduled Castes from 15 per cent to 30 per cent in all government schemes pertaining to the allotment of plots or houses in the state. The state government will establish 16 specific industrial parks.