CHANDIGARH: The financial crisis in Punjab will further worsen in the days to come, this is partly because of a novel decision taken by the government and mounting demands by the newly appointed chairmen of various corporations Certain MLAs have also demanded house building and other loans on Tow rates of interest.
The government, sources say, has decided to pay the income tax on behalf of the council of ministers. There are 27 ministers in all. The state exchequer will have to cough up anything between Rs 12 lakh and Rs 15 lakh to pay the income tax of the ministers.
Sources say that were the ministers to pay the income tax from their own pocket the total amount payable by all the 27 individually would have been around Rs 7.50 lakh. It is, perhaps for the first time that a government in Punjab has decided to pay the income tax of its council of ministers. To justify this, the East Punjab Ministers Salaries Act, 1947, is believed to have been cited.
The average annual salary of each minister has been put at Rs 30,000, ‘The perquisites and other facilities are additional. These included furnishing, entertainment expenses high house rents for the accommodation hired by them etc. Therefore, paying of income tax by the government in itself was a big perquisite now granted to them. The central legislation, however, does not give any immunity to the state ministers on payment of income tax.
Sources revealed that the Range Income Tax Department had asked the Stale government some time back to finish details of the quantum and manner of disbursement of salaries and allowances to the ministers. In fact, little did these ministers know that the allowances they had enhanced for themselves in the July 1992, session of Punjab Vidhan Sabha would also invite the attention of the income tax authorities. Most of the allowances were taxable, with varying limits of taxability.
The council of ministers ay one of their meetings last year had announced a 10% cut in their pay as an “austerity” measure in view of the financial crunch faced by the state, That announcement had merely meant a cut of just Rs 250 per month, per minister. The ministers had spent over Rs 6, 90 lakh between February and June, 1992, on various “luxury” items. Because of political exigency the government has announced the appointment of at least 16 chairmen of various corporations. This has been done even in the case of such public sector undertakings, corporations and boards which were either “sick” or which the government had decided to “wind up~ because of their poor performance.
It was estimated that each chairman would cost anything between Rs 1 lakh and Rs 1.50 lakh per month to the state exchequer.
There are reports that some of the chairmen had put up a demand for a Contessa car for their use besides installation of television sets at their residences, refurnishing of their offices and acquisition of residential accommodation commensurating with their “status”. One of the chairmen is reported to have asked even for Rs 25,000 in cash as impressed money. How does the government plan to justify its actions given the financial situation and the tough stand taken by the Union Ministry of Finance to its request for financial help?
There are also reports that certain MLAs have represented to the Chief Minister that the loans obtained by them for house building or other purposes should be advanced at a differential rate of interest of say only 4%. A government employee had to pay an interest rate of 10% to 15% for loan availed from the government, Can there or should there be discrimination on this account between ordinary employees and MLAs?
It is being pointed out that it was just recently that the Union Finance Minister had raised the income tax exemption limit to Rs 30,000. In the case of ministers their monthly salary was around that amount. By adding the perquisites etc the ministers automatically will figure in the higher bracket of income tax.
How long can Punjab afford to allow itself to be burdened by such decisions which go against the very spirit of austerity and the administrative reforms it has initiated to effect economy and efficiency?
Article extracted from this publication >> May 21, 1993
