CHANDIGARH: The Centre has asked Punjab to mobilise additional resources of Rs 50 crore for the State’s 1988 -89 Plan or to cut the Plan size from Rs 700 crore to Rs 650 crore.

The Punjab Government is however, not inclined to take any of these steps at this stage. The Governor, Mr. S.S. Ray, is understood to have told the Centre that it will not be advisable to impose any new levy in view of the prevailing situation in the State. Slashing the Plan will also adversely affect the economy which has already been hit by violence.

The question of funding the Plan and bridging the yawning resource gap was discussed at various levels both at Delhi and Chandigarh in the past few days. The picture that has emerged as a result of these discussions indicated that Punjab needs around Rs 370 crore more to finance its Plan of Rs 700 crore after taking into account the Centre’s special assistance of Rs 650 crore.

The provisions for this amount have already been made by the Centre in its budget and supplementary demands presented to Parliament in the budget and the just ended session of Parliament.

While approving the Rs 700 crore Plans, the Planning Commission had obtained a commitment from the State Government that it would mobilise additional resources of Rs 50 crore. In fact, the Government mooted proposals for raising power tariff and bus fares but in view of the disturbed state of Punjab, it has not taken any action ‘on these moves so far.

Apart from the failure of the Government to raise the promised. resources what has caused further deterioration in the financial position of the State Government is the uncovered shortfall of Rs 186 crore in the 198788 budget presented to the State Assembly on

March 20, 1987. He has indicated that the Rs 186 corers which was indicated by the former finance minister Mr. Balwant Singh in this 198788 Plan will be covered by raising institutional funds with the help of the Centre. The move has not materialised so far.

At one of the high level meetings held early this month in Delhi which was attended by senior officers from Punjab including Mr. R.P. Ojha, Chief Secretary and Mr. R.N. Gupta, Finance Secretary, the Centre was requested to help the state raise Rs 186 crore from the financial institutions.

Another factor which has led to the deterioration in finances is the big carry over deficit from 198788. Although Mr. Balwant Singh had presented a “balanced budget” indicating nil deficit, the current financial year opened with deficit of Rs 134 crore. This was mainly due to the numerous concessions given to the people particularly, the Punjab farmers, by the Government’s Administration during 198788.

Although a further deterioration to the extent of around Rs 75 crore per annum in the State’s finances has reportedly taken place since the beginning of the current financial year, official sources hope to meet this additional expenditure with the increased returns expected from the buoyancy in revenue from sales tax and excise duty.

The increased burden is mainly due to the increase in expenditure on the police and higher needs of the Punjab State Electricity Board. The police department may claim another Rs 40 to Rs 50 crore in addition to its current year’s budget provision of around Rs 85 crore.

The additional burden on the state exchequer on account of the board’s demands is likely to be Rs 75 crore.

Article extracted from this publication >> September 30, 1988