Chandigarh, September 21
Punjab will shortly review the entire gambit of subsidies being given to various sectors. The exercise, aimed at improving the state’s fiscal health, will cover subsidies in power and agriculture sectors, old-age pensions, shagun scheme, atta-dal scheme, octroi and house tax.

As part of the initiative, a two-member committee comprising Deputy Chief Minister Sukhbir Singh Badal and Industries Minister Manoranjan Kalia has been formed. They will submit their report within a month.

The fresh move is also being seen as an attempt to remove the deadlock between the SAD and the BJP over the issue of proportion of subsidies being extended in the urban and rural areas.

The co-ordination committee of the two parties — which met here last night to discuss the issue of “hike in electricity tariff” for urban consumers — repeatedly referred to the poor fiscal health of the state and the need to take drastic measures to set the things in order.

The BJP demanded that the hike in the power tariff for urban consumers should be subsidised or the subsidy being given to the rural areas be withdrawn. As a convenient face-saving measure, the panel took a decision to let the electricity bills with arrears since April 1, 2009, be distributed. But this will come with the rider that if the Power Regulatory Commission allows the government to subsidise the urban sector, the hiked amount will be adjusted in the subsequent power bills.

Both the SAD and the BJP know that the state cannot bear any additional financial burden, so they won’t be able to push back the power tariff hike.

On the other hand the two-member committee, which has been assigned the task of reviewing subsides, will be under tremendous pressure. For additional resource mobilisation, the committee has to recommend scrapping of some subsidies and imposition of new taxes.

However, SAD chief Sukhbir Badal is all in favour of maintaining status- quo on subsidies. In fact, he has been suggesting that all subsidies be continued as such. It is because of pressure from the BJP following a power tariff hike for urban consumers that the government has been forced to have a rethink on subsidies.

Not wanting to appear as having succumbed to the BJPs pressure, the government’s spin doctors are now saying, “The issue of subsidising urban power consumers has not been decided. The power regulatory commission will give its take on the issue. 

Till then, the bills have to be paid as per the hiked tariff along with arrears from April 1”. Pressure is mounting on Punjab to end subsidies to get a favourable response to its debt-waiver plea from the 13th Finance Commission.