The Punjab government today presented Budget for the 2015-16 financial year without proposing any new taxes.
Presenting his fourth successive Budget, Punjab Finance Minister Parminder Singh Dhindsa estimated a deficit of Rs 125 crore at the close of 2015-16 financial year.
The receipts for the next fiscal have been proposed at Rs 60,585 crore as against Rs 54,096 crore in current financial year.
Dhindsa said Rs 60,585 crore receipts in coming fiscal include Rs 46,229 crore of revenue receipts and Rs 14,356 crore of capital receipts as against the current year figures of Rs 42,742 crore and Rs 11,353 crore, respectively.
The expenditure has been proposed at Rs 61,814 crore as against the current year’s figure of Rs 56,431 crore.
He said next fiscal’s proposals include Rs 52,623 crore of revenue expenditure, Rs 4,857 crore of capital outlay, Rs 3,598 crore of repayment of public debt and Rs 736 crore of loans and advance disbursals.
Dhindsa said the fiscal deficit will be 2.98 per cent of GSDP (Gross State Domestic Product) and revenue deficit will be 1.60 per cent of GSDP.
He said that his Budget proposals were of Rs 79,314 crore and annual plan was of Rs 21,174 crore.
“However, the effective Budget size is Rs 61,814 crore as the above figure (Rs 79,314 crore) contains a Budget provision of Rs 17,500 crore towards ways and means transactions during the current year,” he said.
The Minister said, “The year begins with a negative opening balance of Rs 69 crore. The total receipts are likely to be Rs 60,585 crore. The closing balance at the end of 2015-16 would be (-) Rs 125 crore.”
He said the world is upbeat about India as our economy has entered into a promising era with a series of economic reforms ushered by the NDA government at the Centre.
“These times present a unique opportunity to the state to uplift its own economy by becoming a key partner in the national economic growth process,” he said, adding that the SAD-BJP alliance government in Punjab with support of NDA government at the Centre will herald a new dawn for Punjab.
Dhindsa said the Budget has been prepared against a changed backdrop created by increased devolutions from the 14th Finance Commission and a concomitant reduction in plan transfers to states in the Union Budget.
“The steps and policies outlined in the Budget for 2015-16 presented by me reflect on the commitment of the government to put the state economy on path of sustained (and) high economic growth, the benefits of which will reach all sections of the society,” he added.
Dhindsa said the Budget also lays down the steps to steer the state towards the course of prudent fiscal consolidation and industrial development.
“While we chart the course of Punjab’s economic progress we are mindful of the diverse challenges facing the state like drug abuse, adverse child sex ratio, rising incidence of cancer, fiscal stress and unemployment in youth,” he said.
As per advance estimates, the GSDP at current prices is estimated to grow at 10.16 per cent in the current fiscal.
“During the year 2013-14, the GSDP at constant prices grew at 5.73 per cent against the national growth rate of 4.74 per cent. The per capita income of the state at current prices is also estimated to increase from Rs 92,350 in 2013-14 to Rs 99,578 in 2014-15,” he added.
He further said that to promote growth by judicious use of scarce resources and to achieve intergenerational equity, fiscal discipline is of utmost importance.
“The government is taking all steps to ensure that it “lives within the means” and thereby stabilise its deficit and debt position,” he said.
The Minister said that the 14th Finance Commission has increased the share of Punjab in central taxes from 1.389 per cent to 1.577 per cent.
He added that the Commission has also removed the state from the list of states needing revenue deficit grant.
Dhindsa said Punjab is well within limits of most of the fiscal targets set by the 13th Finance Commission and under the FRBM Act.
“The fiscal deficit came down from 3.45 per cent of GSDP in 2006-07 to 2.77 per cent of GSDP in 2013-14 and is estimated at 2.97 per cent of GSDP in 2014-14 (RE) well within the 13th Finance Commission target of 3 per cent.
“For the year 2015-16 (BE), the fiscal deficit of the state government is projected at 2.98 per cent of GSDP,” he said.
He added that the diligent efforts of the state have enabled it to keep debt within manageable limits as is reflected in the rapid decline in debt to GSDP ratio.
“In 2014-15, the outstanding debt to GSDP ratio was pegged at 32.27 per cent (RE), well ahead of the target of 38.7 per cent set up by 13th Finance Commission for the year 2014-15.
“During 2015-16, the outstanding debt to GSDP ratio of the state is projected to be 31.34 per cent of GSDP,” Dhindsa said.
He added that reduction in revenue deficit remains a challenge for the state in the wake of the implementation of the 5th Punjab Pay Commission recommendations which saw a significant increase in its committed expenditure on salaries and pensions.
Due to sustained efforts of government, the state’s tax revenue to GSDP ratio as also the non tax revenue have increased in recent years, Dhindsa said.
However, declining share of Punjab is central taxes had constrained the overall resource position of the state.
“This situation though is set to take a better turn now with the latest 14th Finance Commission recommendations which resulted in increased devolution albeit at the cost of reduced plan allocation,” he added.