Punjab’s fiscal landscape on Tuesday witnessed a significant milestone as Finance Minister Harpal Singh Cheema presented the third budget of the Aam Aadmi Party led State Government for the fiscal year 2024-25, amounting to a whopping Rs 2,04,918 crore. This marks the first time the state's budget has surpassed the two-lakh-crore-mark, underscoring the government's commitment to addressing critical sectors like education, agriculture, and health.

Despite widespread anticipation, the state budget did not address the proposal for providing Rs 1,000 per month to all women aged 18 and above in the state. However, the Finance Minister introduced several new initiatives aimed at fostering holistic development across various domains with ambitious initiative ‘Malwa Canal Project’ — designed to reduce reliance on groundwater and optimize Punjab's under-utilized share of the Beas-Satluj river — leading the pack.

Additionally, Cheema also announced the establishment of 1000 sports nurseries across the state’s rural areas, creating ‘Schools of Brilliance’, ‘Schools of Happiness’, and ‘School of Applied Learning’, besides initiating ‘Mission Phulakri’ and ‘Mission Unnat Kisan’, among others.

The fiscal projections also shed light on the state’s escalating debt burden, estimated to reach Rs 3,74,091 crore by the end of current fiscal, up from Rs 3,43,626 crore as per the 2023-24 revised estimates. Despite the fiscal challenges, the budget outlay for the upcoming fiscal year reflected a 2.93 percent increase compared to the previous year, emphasizing the government's commitment to sustained growth and development.

In terms of revenue, the budget projected total receipts of Rs 1,03,936 crore in current fiscal, with own tax revenue (OTR) contributing Rs 58,900 crore. Additionally, the state anticipated receiving Rs 22,041 crore as its share from central taxes and Rs 11,748 crore as Grants in Aid from the Centre. However, the expenditure projections indicated a revenue expenditure of Rs 1,27,134 crore, highlighting the need for prudent financial management and resource allocation.

The budget has a revenue deficit of Rs 23,198 crore at 2.77 percent, coupled with an effective fiscal deficit projected at 3.80 percent.

Cheema emphasized Punjab's economic growth, citing a current growth rate of 9.41 percent, with the Gross State Domestic Product (GSDP) standing at Rs 7,36,423 crore. Projections indicate a further growth of nine percent, reaching Rs 8,02,701 crore in the upcoming financial year 2024-25.

Despite notable progress, Cheema highlighted challenges stemming from the Union Government withholding Rs 8,000 crore, designated for crucial areas like the National Health Mission, Rural Development Fund, Mandi Development Fund, and Special Assistance for capital investment.

Agriculture

In terms of sector-specific allocations, the budget earmarked Rs 13,784 crore for agriculture and allied sectors, with a specific allocation of Rs 575 crore for crop diversification initiatives. “I propose a budgetary outlay of Rs 194 crore for soil and water conservation, including proposals to undertake two new NABARD projects for providing financial assistance to farmers for laying underground pipelines for irrigation,” said Cheema in his budget speech. Cheema said that the government understands the importance of Punjab Agricultural University (PAU), Ludhiana, alleging that no concrete steps have been taken by the previous governments to strengthen and modernize PAU. He allocated Rs 40 crore “for the development of research-related and other infrastructure in the University in FY 2024-25”.

Power Subsidy

Additionally, Rs 7,780 crore is dedicated to providing 300 units of free power to domestic consumers, while Rs 9,330 crore has been allocated to extend free power subsidies to farmers for pumping water from tube wells. In addition, an allocation of Rs 3,367 crore has been made for the industry — taking the state’s power subsidy bill to Rs 20,200 crores.

Groundwater

However, Cheema also highlighted concerns regarding groundwater depletion, noting that 114 out of 150 blocks in the State have been classified as dark zones due to critically low groundwater levels. He unveiled plans for the ‘Malwa Canal Project’, aimed at reducing groundwater dependency and optimizing the utilization of Punjab's share of the Beas-Satluj river water during the Rabi period. The ambitious project, covering approximately 1.78 lakh acres, is poised to benefit farmers in Bathinda, Faridkot, Ferozepur, and Muktsar districts.

Education

In his budget, Cheema allocated Rs 16,987 crore for the education sector, representing around 11.5 per cent of the total estimated expenditure for the fiscal year. “118 government schools will undergo a transformation to become state-of-the-art ‘Schools of Eminence’ and 14 School of Eminence have already been started. The government has budgeted Rs 100 crore in FY25 for this purpose,” he said. He said the government proposes to launch ‘Mission Samrath’ to imbibe essential skills to the primary and upper primary students with a proposed allocation of Rs 10 crore in FY 2024-25.

Health

In the health sector, a total of 829 Aam Aadmi Clinics have already been established in the state and many more are in the pipeline. “80 types of medicines and 38 diagnostic lab tests are being provided free of cost at these clinics. So far, more than one crore patients have availed treatment,” he said, while allocating Rs 249 crore “for strengthening this revolutionary initiative further”.

Strengthening Police Force

Cheema has made a budgetary outlay of Rs 10,635 crore for Home Affairs, Justice and Jails Department to support the law enforcement initiatives. “Punjab Police is making substantial strides in law enforcement by partnering with IIT Ropar to establish an Artificial Intelligence and Machine Learning (AI-ML) Lab which would use artificial intelligence for sophisticated crime analysis and would address evolving challenges being faced in law enforcement,” he informed the House.

Revenue Growth

Cheema said that the state’s own tax revenue was Rs 27,747 crore in 2016-17 and Rs 37,327 crore in 2021-22. “It is through the AAP Government’s efforts that the own tax revenue has jumped significantly to Rs 42,243 crore in 2022-23 and is expected to be Rs 51,400 crore in 2023-24,” he said.

“Similarly, non-tax revenue was mere Rs 5,863 crore in 2016-17 and only Rs 4,784 crore in 2021-22. After the present Government’s formation, it has jumped to Rs 6,232 crore in 2022-23 and now it is expected to touch Rs 10,051 crore in 2023-24,” he said.