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'Shallow' promises in Punjab budget: Raw deal for social sector amidst rising debts

Manpreet Singh Badal, Finance Minister, Punjab
By Dr Gian Singh* 
The annual budget is a very small glimpse of government policies which is often deceptive. Significant changes are made to the government's revenue and spending policies in the budget due to political and many other calculations. With the passage of time, the economic condition of the State governments has been made very poor as compared to the Central government. The dependence of the State governments on the Central government in economic matters seems to be increasing day by day.
Despite these facts, the common man waits for the budget so that this time the promises made to him by the rulers may come to naught and some of his problems may be solved. The general public's expectations of the pre-election budget are at an all-time high because after four years of deep sleep by the rulers, the rulers are compelled to do something for the people to come to the polls next year. At the same time, the rulers are finding it easier to claim that they have fulfilled the promises made to the people and to make new promises for the next five years.
Mela (fair) is very important in human nature. Ordinary people expect a lot of happiness from Mela. This expectation is fulfilled only if the visitors of the fair have money in their pockets to buy new clothes, shoes and the like as well as to buy food and drinks and some other useful items during the fair. If there is no money in the pocket, then with the help of old clothes and lack of money to buy food and other items, the condition of the people going to the fair deteriorates.
In the run up to the 2017 Assembly elections in Punjab, various political parties in their respective election manifestos and election rallies had showered promises of a fair to the people. At that time the people of Punjab were hoping for a good fair from the election promises of the Congress party which resulted in the party winning and forming its own government.
The Congress party not only verbally claimed the waiver of all institutional and non-institutional debts of farmers and agricultural labourers to show the people a good fair, but also sought written information from the people on their debts. Apart from this promise, many other promises were made besides providing employment to every household.
In the budget presented by the Punjab Finance Minister in the Vidhan Sabha on March 8, Rs 1,712 crore has been provided to clear the debts of farmers and agricultural labourers and promised to provide 48,989 jobs in government departments and free travel facility to women and students in government buses.
The old age, widow, disabled and destitute pension has been increased from Rs 750 per month to Rs. 1500 per month, the amount to be paid under Ashirwad scheme has been increased from Rs 21,000 to Rs. 51,000, the recommendations of the Sixth Pay Commission would be implemented from July 1, two new medical colleges at Kapurthala and Hoshiarpur, one new college at Malerkotla, a grant of Rs 90 crore to Punjabi University, Patiala, Rs 19,641 crore for social services, Rs 11,000 crore for electricity subsidy for all sections and Rs. 200 crore for agricultural diversification.
A survey conducted in Punjab by the author and his colleagues revealed that Punjab's marginal, small, semi-medium and medium farmers and agricultural labourers have so much debt that what to talk about the repayment of their debt, they are not in a position even to pay the interest on it as they are forced to take loans to keep the stove burning for their mere two meals.
As we move from the large farm-size category to the marginal farm-size category, the debt burden per acre increases. The worst hit debtors are agricultural labourers because they have no other means of production other than selling their labour. The research study was discussed in the Vidhan Sabha in 2017 and the government assured to waive off the debts of farmers and agricultural labourers.
Various research studies conducted in Punjab and government data have highlighted that at present the debt of farmers is close to Rs 1.5 lakh crore and there are different estimates of debt of agricultural labourers. The Punjab government waived only a nominal debt (less than Rs 5,000 crore) of marginal and small farmers but the farmers were humiliated by the politicians in public functions when they were given debt relief certificates and the agricultural labourers were completely forgotten.
Now, in view of the 2022 elections, the Punjab government has set aside Rs 1,186 crore for waiving loans of 1.13 lakh marginal and small farmers and only Rs 526 crore for agricultural labourers. Past experience has shown that when debt waiver certificates are distributed, many will be disqualified by creating all sorts of knots and those who will be given debt waiver certificates will be humiliated by taking photographs in public.
A door-to-door survey conducted by Punjabi University, Patiala, Guru Nanak Dev University, Amritsar and Punjab Agricultural University, Ludhiana revealed that 16,606 farmers and agricultural labourers committed suicide between 2000 and 2016. About 40 per cent of them are agricultural labourers and about 76 per cent of the farmers are marginal and small farmers. Debt has been the main cause of suicides among farmers and agricultural labourers.
The Punjab government has been providing free electricity and water to the farmers for irrigation in view of the rising debt burden of the farmers due to the anti-farmer policies being adopted by the Central government. The subsidy has been widely criticized by the Central government, the Niti Aayog, the corporate/capitalist world and some of the affluent sections.
In this year's budget, Rs 11,000 crore has been earmarked for power subsidy to all sections out of which Rs 7,180 crore is for agriculture, Rs 1,928 crore for industries and the rest for other poor sections. At first glance, the amount of electricity subsidy for agriculture may seem huge, but it is important to think seriously about why electricity has been privatized. When will the implicit taxes of Rs 45 lakh crore imposed on farmers in 17 years be paid to the farmers and when will the government stop doing so?
The announcement in the budget of free travel facility for women and students in government buses is welcome. But in this regard, it also raises the question as to why is the bus transportation going into private hands day by day. Why is this free travel facility not provided in private buses?
Increasing the old age, widow, disabled and destitute pension in the budget from Rs.750 per month to Rs. 1500 per month will definitely give some relief to these sections. The point that needs to be taken into consideration in this regard is how these sections of the society, who are suffering from various afflictions, will be able to live with Rs 50 per day. In this regard it is important to mention the pensions of MLAs and MPs or they too should realize the difficulties of these categories by taking Rs 1,500 per month. Apart from this, even the meager pension given to these sections is not received on time due to which they are seen stumbling.
Rs 11,000 crore has been earmarked for power subsidy out of which Rs 7,180 crore is for agriculture
The announcement of the Punjab government to provide jobs to 48,989 people in the various government departments seems good. There are many aspects that need attention in this regard. In 2017, before the elections, door-to-door employment was promised. If employment had been provided to every household in the last 4 years, why would our young children migrate in large numbers to foreign countries?
A study conducted by Dr Gurinder Kaur, Dr Gian Singh, Dr Dharmapal, Dr Rashmi, Dr Rupinder Kaur, Dr Sukhveer Kaur and Dr Jyoti on international migration of young children from Patiala district due to lack of employment has revealed that Punjab and the whole country is suffering a lot more than just brain drain, capital drain and loss of demographic dividend.
Under the Ashirwad scheme, the amount to be given for marriage of girls from poor families is increased from Rs 21,000 to Rs 51,000. Despite the passage of more than seven decades of independence, our rulers have not been able to provide the ordinary working people with even the minimum level of income in which they can meet their basic needs in a respectful manner. The rulers must answer when they will do so?
The Punjab government has announced the implementation of the Sixth Pay Commission for its employees for which Rs 9,000 crore has been earmarked. It has also been stated that if there are any arrears of government employees, these will be paid in phases. The Central government and many State governments have already paid the revised scales and arrears to their employees.
The announcement to open two new medical colleges in Kapurthala and Hoshiarpur and a new college in Malerkotla is welcome. The point to consider in this regard is when will the severe shortage of staff and facilities in the existing medical colleges be met? Higher education can be imparted to the young children by opening new colleges, but in around last 25 years, professors have not been recruited in the government colleges of Punjab and the teaching is being done with the help of guest faculty. Among these guest faculty teachers are those who are unemployed because they have not been paid for months.
Punjabi University, Patiala, is one of the leading institutes in Punjab for imparting education and research to young children. This institute has contributed immensely to a large number of students and researchers from different areas, especially Malwa, to reach the heights of their lives. But now due to the negligence and wrong policies of the Punjab Government, its very existence is in jeopardy.
Persistent reduction in grants to universities has led to a situation where teachers and staff have been protesting and struggling to get their salaries and pensions. How will the teachers who do not get their salaries on time do research and development work? In this budget a grant of Rs 90 crore for Punjabi University, Patiala may provide temporary relief for 3-4 months, but the definitive solution is to increase the grant given by the Punjab Government as required.
Announcing Rs 200 crore for agricultural diversification may provide some relief, but only the Central government can come up with a concrete solution. The Central government and the Niti Ayog often give advice/instructions to the farmers and the Government of Punjab in this regard. At present, agricultural diversification is not possible without the help of the Central government. Therefore, the Punjab Government should take a stand with the Central government and persuade it so that the land, groundwater, environment and people can be saved from various problems.
Punjab's political parties are wasting a lot of time blaming each other. There are some very important aspects of Punjab that all political parties need to pay attention to. According to the Reserve Bank of India, Punjab's social sector expenditure during 2016-17 was Rs 48,270 crore which was reduced to Rs 24,896.10 crore during 2019-20. The per capita expenditure of Punjab was Rs 6,980 while that of Haryana was Rs 13233 and the national figure was Rs 8962.
In the current budget of Punjab, the social sector expenditure has been further reduced to Rs 19,641 crore. According to a CAG report, the Punjab government has a debt of Rs 1.93 lakh crore in 2019-20 which will increase to Rs 3.93 lakh crore in 2024-25. With 73 per cent of the new loans taken by the Punjab government, only the old loans and interest on these loans are being repaid.
One of the reasons for the steady rise in debt of the Punjab government is the ongoing discrimination by the Central government. Subsidies to industries in hilly states, militancy-era law and order costs imposed on Punjab, Punjab being a border state and not providing financial assistance for contributions to the Central pool of foodgrains by bearing huge losses and some others are responsible for increasing debt of the state and many other problems.
Most of the political parties in Punjab and other states are responsible for the weakening of the federal structure of the country. When the law on GST was enacted, most of the political parties supported it, but now the Central government is forcing the states to take loans by not paying their share of the GST.
Playing a game of statistics with the help of government economists to mislead the states, the Central government has claimed that the share of the states in the taxes collected by the Central Government has been increased from 32 to 42 per cent. But in reality, the revenue from tax surcharges and cesses, which constitute 19.9 per cent of the total tax revenue of the Central Government, was excluded. Out of 42 per cent, one per cent is reserved for Jammu and Kashmir. In fact, the share of states was merely increased from 32 to 32.84 per cent.
Therefore, it is the need of the hour to strengthen the federal structure by allowing the states, municipal committees/corporations, panchayats to impose and collect taxes at their own levels. All the political parties should increase pressure on the Central government through deliberations to strengthen the states.
States can make commendable contribution to the development of the country while developing themselves. By doing so, all states, including Punjab, will be in a position to make their budgets pro-people. The Punjab Government should also set up state corporations for trading in sand, gravel, liquor and the like to increase its revenue.
---
*Former Professor, Department of Economics, Punjabi University, Patiala

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