The first complete state budget worth Rs 1,96,462 crore — 26 percent more than the previous year’s budget size — presented by the Aam Aadmi Party (AAP) Government in Punjab on Friday turned out to be more taxing for the State than its people. Despite the challenge of resource mobilization for implementing its pre-polls promises, including a monthly stipend of Rs 1,000 to every 18-plus woman in the State, the Government’s estimated subsidy bill rose to over Rs 20,500 crore. Punjab’s debt is also expected to rise to Rs 3.47 lakh crore by the end of 2023-24 financial year.
 
Finance Minister Harpal Singh Cheema, at the same time, did not impose new taxes on the people for the second year in a row. The focus primarily remained on agriculture, education, and health sectors on expected lines, along with infrastructure development. It also proposed 2.50 lakh jobs.
 
Facing allegations of deteriorating law and order situation, Cheema also proposed a budgetary outlay of Rs 10,523 crore for the police –– an increase of 11 percent than the previous year.  No less than Rs 64 crore was proposed for modernization of the police force to tackle crime and maintain law and order.
 
Finance Minister also announced various new schemes, including a market price risk mitigation scheme for the horticulture sector, solarisation of agriculture pumps, a young entrepreneur scheme, two coaching initiatives for students, ‘Bill Leayao Inaam Pao’, among others in his second paperless budget.
 
Cheema, sharing the State Government’s focus areas for the year 2023-24, said that the Government aims to boost the income of farmers by promoting agricultural and allied activities, creating a conducive environment for industrial promotion, and infrastructure development, as well as strengthening the state finances.
 
Coinciding with the first anniversary of the formation of AAP Government in Punjab, Cheema highlighted the State Government’s steps for employment generation, making Schools of Eminence, and creation of Aam Aadmi clinics, besides providing 300 free units of power to domestic consumers and steps to boost the agriculture diversification by promoting moong cultivation.
 
Praising the AAP Government, under the leadership of Chief Minister Bhagwant Mann, for eliminating the “mighty mafia”, Cheema said: “Many of those who looted Punjab are already languishing behind bars. Once omnipresent and powerful mafia, which operated with impunity, is now nowhere to be seen. Many sectors which reeked with corruption and mafia raj have been purged with clear political will and honest intentions.”
 
“More than 10 lakh people have got free treatment in Aam Aadmi Clinics since their opening. The Government has opened schools of eminence. 26,797 jobs in government and its agencies have been provided by the AAP government… Unlike previous Governments, we would regularly recruit and create an ecosystem for private sector jobs for Punjabis to stop the process of brain drain,” he said.
 
Listing out the ‘guarantees’ fulfilled by the state government, Cheema said: “The Government took a historic decision of 300 units of free power to domestic consumers. Almost 90 per cent of Punjab’s households are now getting zero bills.”
 
Improving Financial Indicators

Cheema, quoting figures to indicate improving state’s finances, said that the state’s GSDP has increased by 9.24 per cent this year to Rs 6,38,023 crore and is expected to increase to Rs 6,98,635 crore in the next fiscal. “The contribution from service sector remains highest at 45.91 percent followed by agriculture and allied sector at 28.94 percent and industries at 25.15 percent in the GSDP of Punjab during 2022-23. However, agriculture sector still plays a dominant role in the State GSDP in comparison to all India contribution of 18.11 percent. Further, the Per Capita Income stood at Rs 1,73,873 at current prices in 2022-23 registering a growth of 7.40 per cent,” he said.
 
Cheema said that the effective Revenue Deficit and Fiscal Deficit have been pegged at 3.32 percent and 4.98 percent respectively. As per estimates, the Revenue Expenditure is expected to be Rs 1,23,441 crore “which shows an incremental growth of 14 percent over the budget estimates of 2022-23”.
 
“Out of this, Rs 74,620 crore is proposed towards the committed expenditure — a jump of 12 per cent in comparison to budget estimates of 2022-23,” he added.
 
Cheema further said that the budget estimates of effective Capital Expenditure is pegged at Rs 11,782 crore which is an increase of 22 per cent over the previous year. “The Government would adopt a targeted approach towards undertaking developmental activities during 2023-24,” he added.
 
Checking Tax Evasion

Sharing the government’s measures to bring fiscal prudency and efficiency in management of State Finances, Cheema said that Tax Intelligence Unit, to check revenue leakage, has been duly notified and would be fully functional in 2023-24. “This Unit would develop systemic tools for detection and recovery of tax evasions and non-compliances by the obligated taxpayers. Experts are being hired to examine the entire gamut of taxation and non-tax revenue streams to further mop up revenue of the State,” he said.
 
For the first time, the government has ensured that the consolidated sinking fund of the State has been given a boost by diverting Rs 3,000 crore towards it in just one year. “With the twin motive to consolidate State Finances and offset the State debt, Government has contributed Rs 3,000 crore in the Consolidated Sinking Fund (CSF) in 2022-23. The previous Government contributed only Rs 2,988 crore in last five years,” he added.
 
Mounting Subsidy Burden

The budget proposals indicated that the state government’s subsidy bill, for the 2023-24 fiscal, will rose up to Rs 20, 741 with a major share of Rs 9,331 crore for free power to the agricultural tubewells. Besides, subsidy of Rs 7780 crore will be provided to the domestic power consumers, while a power subsidy of Rs 3133 crore will be given to the state’s industries. In addition, a subsidy of Rs 497 crore will be provided for the free bus travel to women.
 
Rs 13,888 cr for Agriculture

Cheema said Rs 13,888 crore has been allocated for agriculture and allied activities, which is 20 percent more than the previous financial year. Stating that the new agriculture policy will also be announced shortly, Cheema said that a risk mitigation scheme — Bhaav Antar Bhugtan Yojana — will be launched for horticulture producers.
 
With the assurance to reduce stubble burning in the upcoming kharif harvest, Cheema announced Rs 350 crore for providing machines on subsidy to farmers for in-situ and ex-situ management of paddy straw.
 
In the current fiscal’s kharif harvest, the Minister said the state managed to reduce incidets of stubble burning by 30 percent as compared to the previous year’s 71,304 cases. In the 2022-23 financial year, there were 49,922 incidents of farm fires. “Our Government has notified replacement of 20 percent of coal with paddy straw briquettes as fuel in approximately 2,500 brick kilns operating in Punjab and the same shall become applicable with effect from May 1, 2023. This would not only help in stubble management but would also create positive externalities,” he said.
 
For crop diversification, Cheema announced Rs 1,000 crore with focus on increasing area under aromatic paddy basmati, cotton, and oilseeds and reducing area under water-guzzler paddy varieties. Rs 350 crore has been allocated under the Sub-Mission on Agriculture Mechanism to provide various machines or equipment to augment productivity and to manage paddy stubble.
 
He also proposed a Crop Insurance scheme “to provide insurance to farmers to save them from vagaries of the weather and other uncertainties. The modalities of the crop insurance scheme are being worked out”.
 
Education Allocation up by 12%

Cheema allocated Rs 17,072 crore for school and higher education — 12 per cent higher than the budget outlay in the previous year. “Our government considers quality and outcome-based education as the pillar of any society. We’ll not just concentrate on building classrooms and procuring blackboards and furniture. The focus is and would be on transforming the very way teaching is done. The pivot of all efforts would be to develop critical thinking, problem-solving aptitude, other life skills and most importantly ethics in every student,” said the Finance Minister said.
 
Sharing key initiatives taken in 2022-23 fiscal, he pointed process for regularizing contractual teaching and non-teaching cadre, mega parent-teacher meet (PTM) in December 2022, setting up Schools of Eminence, sending teachers/principals for training abroad, among others,
 
“An allocation of Rs 99 crore is proposed in 2023-24 for ensuring basic cleanliness and upkeep of schools, while teachers shall concentrate only on academics…Rs 20 crore has been earmarked for the purpose of school training,” he said.
 
As promised, 117 schools have been identified for being upgraded as schools of eminence. “Work to upgrade has started at four schools of Amritsar on pilot basis. They are being made operational on hub and spoke model, other schools in a given cluster shall be attached to a school of eminence, which will become growth poles of education. They will have the best infrastructure, all education streams, trained faculty, sports and extra-curricular activities, besides career counselling,” he said, adding that Rs 200 crore has been earmarked to upgrade schools to schools of eminence.
 
The Minister also announced Rs 990 crore for providing financial assistance to the state universities, such as Punjabi University, Patiala; Punjab Agricultural University; Guru Angad Dev Veterinary and Animal Sciences University; Sri Guru Teg Bahadur State University of Law; Panjab University, Chandigarh and its constituent colleges.
 
An allocation of Rs 18 crore and Rs 60 crore has been made for the post matric scholarship scheme for the OBC students and SC students, respectively, in 2023-24.
 
Health sector gets 11% more allocation

Cheema proposed a budgetary provision of Rs 4,781 crore for health and family welfare — 11 percent higher than the previous year.  “Our government proposes to launch a special project for strengthening all secondary healthcare institutions – community health centres, sub-divisional hospitals and district hospitals in the state. Not only will a major facelift be given to these hospitals but also a special recruitment drive will be carried out to fill the 363 vacancies of medical officer (specialist) and 470 posts of medical officer (general). I propose an initial outlay of Rs 39 crore in FY 2023-24 for strengthening these health centres,” he said.
 
He added that the Government has already approved seven new mother and child hospitals at a cost of Rs 43 crore, while Rs 37 crore has been earmarked to upgrade five such hospitals. Rs 40 crore will be spent on running and upgrading drug management facilities and centres. Besides, Rs 17 crore has been allocated for the procurement of PET scan and SPECT CT machines for the Homi Bhabha Cancer Centre. The government will also introduce new 24-hour emergency response service by spending Rs 61 crore.
 
Boost to Infrastructure Development

Maximum budget allocation of Rs 26,295 crore — which is 13 percent higher than 2022-23 financial year — was made for the infrastructure development. “One of the key focus sectors this year will be infrastructure development through judicious capital spending,” said Cheema. The allocation for upgrading roads and bridges has been raised to Rs 3,297 crore against Rs 1,495 crore as compared to the previous year.
 
Medical Education and Research
Allocating Rs 1,015 crore for Medical Education and Research, Cheema announced to set up a Trauma Centre at Government Medical College, Amritsar and at Rajendra Hospital, Patiala at a total cost of Rs 100 crore; besides a new Nursing College at Thikriwal village in Barnala district.