AAP government presents 1st budget in Punjab; no new tax, free electricity from July 1

Chandigarh, June 27

Presenting the AAP government’s first budget, Punjab Finance Minister Harpal Singh Cheema on Monday announced providing 300 units of free electricity to households from July 1, setting up of 117 Mohalla Clinics and upgrading 100 schools as ‘schools of eminence’ in the state among other proposals.

The Bhagwant Mann-led government also announced setting up cyber-crime control units in all districts of the state while keeping its focus on health, education, agriculture and police modernisation.

Cheema did not announce any new tax in the budget for 2022-23 and chose to rely on an expected jump in revenue receipts and buoyancy in GST collections by plugging loopholes for funding the proposed expenditure in the budget.

The budget of the government led by AAP, which came to power while making poll promises in the form of “guarantees”, remained silent on giving Rs 1,000 to each woman in the state. However, Cheema said the state government will soon fulfil this “guarantee”.

The finance minister stressed that the government will fulfil its promise of giving 300 units of free electricity per month to each household from July 1, saying it has already planned to finance this scheme by cutting wasteful expenditure and through enhancement of own tax revenue.

Providing 300 units of free power will put an additional burden of Rs 1,800 crore on the state exchequer, said Cheema. The AAP government had announced giving 300 units of free power to every household from July 1.

Cheema said out of five, four “guarantees”—giving 300 units of free electricity, quality education, improving health infrastructure and raising compensation to families of martyred soldiers—have been fulfilled.

Cheema presented the first paperless budget in the ongoing assembly session and this step is expected to save Rs 21 lakh per annum.

Among new proposals, Cheema announced setting up of modern digital classrooms in 500 government schools to bring quality education in villages, upgrading 100 existing schools as “schools of eminence” and posting estate managers for a cluster of schools for the upkeep of government schools and a comprehensive scheme for installation of roof top solar panel systems in government schools.

Cheema proposed to start a Punjab Young Entrepreneur programme for encouraging class 11 students to propose their business ideas. The state government will provide seed money of Rs 2,000 per student under this start-up programme, the finance minister said.

To augment additional resource generation, Cheema proposed to establish a Tax Intelligence Unit which will equip the finance department to improve tax compliances under GST through taxpayer facilitation and communication.

Cheema also announced that the government will set up 16 new medical colleges over five years, taking the total number of colleges in the state to 25. The government will establish 117 “Mohalla Clinics”, for which Rs 77 crore has been earmarked.

The government has taken a breakthrough decision by approving fresh recruitment of 26,454 people and regularisation of 36,000 contractual employees, the minister said.

To strengthen the police force and equip them with latest gadgets, technology and tools to tackle crime, maintain law and order, an allocation of Rs 108 crore is proposed during the FY 2022-23, he said.

Further, cyber-crime control rooms shall be set up in all districts with an outlay of Rs 30 crore, said Cheema. Police have to develop new strategies to deal with crime and criminals. It is important that Punjab police personnel learn about new strategies, said Cheema.

“We accord top priority to the safety and security of our men and women. During our tenure, the entire state would be covered with CCTV network to check the crime and tap criminals,” said Cheema.

This announcement comes amid opposition parties’ allegations of deteriorating law and order in the state.

On the stubble burning issue, Cheema said various possibilities and solutions will be explored and for this Rs 200 crore has been earmarked in the budget.

Noting that the agriculture sector is at a crossroad, Cheema stressed on increasing farmers’ income and promoting crop diversification and earmarked Rs 11,560 crore for the agriculture sector.  Seeking to put all speculations to rest, Cheema said the AAP government pledges to stand by its farmers and shall continue providing free power for the agriculture sector and allocated Rs 6,947 crore for the same.

Stating that his government was sensitive to the cause of poor and downtrodden, the FM said door-to-door delivery of well packaged ‘atta’ in place of wheat to 1.58 crore beneficiaries under National Food Security Act will be ensured. A bailout package of Rs 350 crore for state-owned Punsup has been proposed.

Cheema also announced ‘Farishtey’ scheme on the pattern of Delhi whereby the road accident victims will be given free treatment and the helper would be felicitated.

The focus in the first year will be to restore deteriorating fiscal health, deliver on the promises of good governance by ensuring effective use of public funds and concentrate on health and education, the minister said.

“I propose a budget expenditure of Rs 1,55,860 crore for 2022-23, which reflects 14.20 per cent growth as compared to 2021-22,” he said.

The finance minister said the government has launched a new project namely  Shaheed-e-Azam Sardar Bhagat Singh Hariawal Lehar, under which 50,000 saplings would be planted in all Vidhan Sabha constituencies on the 115th birth anniversary of martyr Bhagat Singh. For industries, the FM announced setting up of a special commission with only traders and businessmen as its members for collaboration with the government in decision making.

A sum of Rs 100 crore has been allocated for setting up and strengthening focal points to promote industry, he said.

Cheema said the state government will issue this year the Gender Responsive Budgeting Guidelines, setting out the strategy to promote the goal of gender equality and mainstreaming for bringing in social transformation and eliminating inequality.

At the outset of his speech, Cheema said several measures are being undertaken to bring fiscal prudence and efficiency in the management of finances.

He also said that the AAP government will set up a model of good governance.

According to the budget at a glance, the state’s effective outstanding debt is expected to be Rs 2,84,870.03 crore by end of current fiscal as against Rs 2,63,265.41 crore (revised estimates) for 2021-22.

To a question on debt, Cheema said the state government borrowed Rs 8,000 crore in the last three months and also said it contributed Rs 1,000 crore in Consolidated Sinking Fund (CSF) of the state within the first two months.

Cheema proposed revenue deficit and fiscal deficit of Rs 12,553 crore and Rs 23,835 crore respectively. The FM proposed revenue receipts of Rs 95,378 crore as against Rs 81,458 crore of 2021-22 (revised estimates).

A total power subsidy bill has been proposed at Rs 15,845 crore as against Rs 13,443 crore in 2021-22.

The GST compensation regime is set to end in June 2022, and based on the trends of previous years, the state government would be staring at a big hole left in its finances to the tune of Rs 14,000-15,000 crore in FY 2022-23, as per the budget document.

Stating that the government has already initiated revenue augmentation measures, the FM proposed an increase of 17.08 per cent in revenue receipts, contributing Rs 95,378 crore to the state exchequer.

 “Hallmark to this ambitious feat is that this would be done without imposing any New Tax on the people of Punjab,” said Cheema.

He also proposed excise revenue of Rs 9,648 crore and 27 percent jump in GST collections in the current fiscal.

The finance minister said that the Janata budget (people’s budget) has been prepared after receiving 20,384 suggestions on the government portal and through e-mails.

The budget also lays provisions for introducing Fiscal Risk Management.

Delhi Deputy Chief Minister Manish Sisodia was among those present in the visitor’s gallery of the Punjab Vidhan Sabha.