CHANDIGARH: The Punjab government proposes to mobilize additional resources to partly overcome the acute resource crisis which has made the State totally dependent on the center for financing its annual plans.

The Governor, Mr. SS. Ray, is understood to have asked the secretaries of different departments to formulate or revive plans by the middle of February which could yield additional revenue for the exchequer. Among the measures and bus fares and hike in some of the municipal taxes.

Since the imposition of President’s rule in Punjab on May 11, 1987, all proposals made by different departments for mobilizing additional resources were being deferred as Mr. Ray wanted that a decision to impose any new tax should be left to a popular Government. He has changed this stand after discussions with the secretaries of different departments held Just week and this week. The Secretaries reportedly argued that as the Government was experiencing acute resource constraints and there was no immediate likelihood of a popular government Coming to power, there was no alternative except to mobilize additional resources to overcome, at least, partly, the acute crisis.

The proposals to raise power tariff and bus fares have been pending for over two years. The Akali Ministry was examining these when Mr. Sunjit Singh Barnala ‘was asked to quit. The proposals

were revived during the Governor’s rule but were deferred. Even the mandatory revisions of fuel surcharge to offset the increases in fuel cost were not made although the fuel cost has been revised thrice.

According to one estimate, if the original proposals, to raise the two tariffs are accepted, these will fetch about Rs 150 crore and Rs 40 crore respectively for the State exchequer. The yields may be somewhat less as the Governor reportedly does not want that any measure of the State Government should “pinch the common man and the farmer too much.” At present the power rates and bus fares in Punjab are said to be the lowest in the region.

Other measures which the Government proposes to take relate to some municipal taxes. Indications are that a 25 percent surcharge may be affected in octori. Besides, octori may be charged on volume instead of on weight. It is also proposed to impose house tax on commercial and industrial buildings within the municipal limits. At present, all such buildings are exempt for a period of five years.

A final decision on these measures will be based on the report of the committee set up by the Government to study the causes for the present state of virtual bankruptcy of the municipal committees in the State. The committee is expected to finalize its report by the first week of February. After conducting a detailed study of their finances, the local bodies’ directorate has already made some suggestions to improve the finances of the municipalities,

It is also likely that the State Government may write off the outstanding loans the municipal committees had taken for water and sewage projects. Besides, the plan allocations for such works may also be enhanced.

Although the revenue yields of the State Government have shown some improvement, the deterioration in the resources has been taking place for the last few years. Apart from the increased expenditure on the maintenance of law and order, various other factors have been responsible for the deterioration. The main factor which has further aggravated the situation this year is the damage caused by the unseasonable and heavy rains in September, 1988.

Although the center approved an assistance of Rs 150 crore for flood relief works, the help on revenue account was only to the extent of Rs 21 crore. The State Government has spent Rs 90 crore ‘on its own. Mr. Ray is understood to have written to the Prime Minister for the additional expenditure.

Another amount of Rs 80 crore earlier the estimate was Rs 12 crore, is required for paying crops. The payment of compensation has not yet started; Mr. Ray has also requested Mr. Gandhi to ensure that the money spent for creating a corridor around the Golden Temple complex should be paid as grants originally agreed to by the Centre. Indications were received from Delhi that around Rs 85 crore needed for the project would be treated as loan. If this happens, it will put additional burden on the State exchequer.

Article extracted from this publication >>  February 3, 1989