• Notification Date: 07-05-2022
• Notification No: N/A

Punjab’s AAP to Face Tough Times Ahead

Punjab’s Aam Aadmi Party (AAP) government is anticipating a difficult time ahead as the Centre is about to stop granting GST compensation from June. Punjab’s AAP government has inherited a debt worth Rs.3 lakh from the previous regime. The decision taken by the Central government to quit granting GST compensation to the states will increase the fiscal deficit of Punjab by Rs.18,000 crore annually from the upcoming year. The state of Punjab will receive Rs.4500 crore for the first quarter of this year till the end of June. The shortfall in the current FY would amount to Rs.13,500 crore.

Punjab’s AAP government has already announced 300 units of free power in the state of Punjab. The scheme is about to get rolled out in July. The details of the beneficiaries are not yet chalked out by the state. According to the analysis of the financial experts, this initiative would cost the AAP government exchequer Rs.7,500 crore annually. The state is already spending around Rs.10,000 crore every year for free farm power and for providing subsidies. The AAP government has also announced that it would be allotting a sum of Rs.1,000 monthly to every woman above the age of 18 years in Punjab. There are about 1 crore women in Punjab. So, the AAP government will have to pay Rs.12,000 crore to the women population every year. The Social Security, Women and Children Welfare Minister, Dr Baljit Kaur has announced that the budget would get ready by the month of June, 2022 and the promised compensations would be chalked out in detail in the budget.

The government of Punjab has recently announced a bonus expenditure of Rs.1,500 per acre for the paddy farmers of the state opting for Direct Sowing of Rice (DSR) technique. The Punjab AAP government also spends almost 20 per cent of the budget for repaying the debts. For servicing the loans, the government of Punjab borrows money. In the Financial Year 2019-2020, the state government of Punjab had paid Rs.17,567 crore for debt servicing. In the 2020-2021 fiscal, the amount paid by the government was Rs.18,588 crore. For the current fiscal, the amount required to be paid by the Punjab government is estimated to be around Rs.20,315 crore.

The government of Punjab is trying to collect resources to fill in this financial shortfall. The financial experts have advised Punjab’s AAP government to collect resources from the excise, transport, and mining industries. The government also requires checking pilferage of power and controlling tax evasion.