CHANDIGARH: The previous Congress government handed over the ruling AAP an immediate and medium-term liability of Rs 24,351 crore while demitting office in March, claimed finance minister Harpal Singh Cheema while tabling a white paper on the state finances in the Vidhan Sabha on Saturday that mentioned "Punjab is in an economic morass and debt trap".
The debt stood at Rs 2.63 lakh crore (2021-22 revised estimates), 45.88% of gross state domestic product and up by 44.23% in last five years that translates into a compounded growth rate of 7.60% per annum, according to the white paper presented two days before AAP government's first state budget.
Delay in pay panel implementation: White paper
The white paper highlighted Punjab has declined from number one position in per capita income to 11th in the country. "The current debt indicators of the state are probably the worst in the country, pushing it deeper into a debt trap," it said, adding the previous governments did not make any attempts to increase the revenue as the state continued to slip into fiscal profligacy.
The finance minister mentioned in the white paper that the 6th Punjab Pay Commission was implemented in July 2021 instead of January 1, 2016, and in haste, just six months before the assembly elections. "The nature and the way it was implemented led to a sense of resentment, uncertainty, anguish and disappointment amongst the employees," stated the white paper. It was further mentioned the previous Congress government could not even pay arrears of revised pay to employees with effect from January 1, 2016, to June 30, 2021, and this pending liability was expected to be around Rs 13,759 crore.
Power supply arrears and interest indicated by the PSPCL to be payable to it by the state government for agriculture, domestic and industry came to over Rs 7,117 crore.
'Fall off the cliff' scenario
"The GST compensation regime is ending in June 2022 and based on the trends of previous years, the state government would be staring down a big hole left in its finances of Rs 14,000-Rs 15,000 crore in the 2022-23 itself financial year, i.e. Rs 20,000 - Rs 21,000 crore per annum. This is a 'fall off the cliff' scenario for the state," according to the white paper.
It mentioned mining, considered to be one of the highest revenue-generating sources of the state's own non-tax revenue, showed a completely opposite picture with the revenue being extremely low - Rs 137 crore during 2021-22. "This is indicative of faculty policy. Lack of enforcement and mismanagement in the mining sector and called for a comprehensive re-visit of the mining sector," it added. "The state's fiscal is inflicted with a deep-rooted structural imbalance and if no corrective measures are taken, it will take a heavy toll on the future development of the state," said the paper.
