Thread by @ramanmann1974

Thread

#Punjab finances

With a debt of 2.63 lakh crore, a revenue deficit of 12,554 crore, a fiscal liability of 24,352 Cr, a liability of 6,068 Cr on debt servicing & GST compensation regime coming to an end in June 2022, AAP Govt has a mammoth task w.r.t keeping it's promises

Punjab's power subsidy bill is already set to touch 18,000 crore this fiscal even as an amount of 7,117 crore is due from the previous fiscal. Govt says that 300 free units will cost 1800 crore, but the power experts say that the government would end up paying Rs 3,000 crore !

The state government is already grappling with free travel facility for women in public sector buses that has cost the exchequer Rs 600 crore this year and state owned transport bodies are crying foul.

The break-up of Rs 24,352.29 crore worth fiscal liability passed on to AAP Govt by its predecessor:-

~6'th pay commission arrears=13,759 crore
~Liability towards the power utility of the state=Rs 7,117.86 crore
~Atta Daal Scheme =Rs 2,274.43 crore
~Loan waiver Scheme=1200 crores

Punjab's AAP Govt also plans to give 1,000 per month to women and is likely to generate a fat bill of Rs 12,000 crore annually. Due to want of finances, the scheme was not announced in the first budget of the government. With no new revenue streams on the anvil, this looks tough.

If the GST compensation regime comes to an end, Punjab would lose 16,000 crore annually given by Centre as GST compensation. With no new taxes in the budget this year, the Govt is banking on 9500 crore from excise, and an uptick in sand mining revenue-Optimism, which will unfold.

#Punjab Govt has a liability of 31,171 crore annually towards salaries, 20122 crore towards interest payments, 15,145 crore towards pensions & retirl benefits, 27,927 crore towards repayments of advances and loans and 20,000 crore towards repayment of ways and means advances.

Of 36,068 crore required for debt servicing alone, 20122 crore would go for interest payments alone; the rest 15,946 crore would go towards repayment of debt, excluding ways and means advances. For ways and means advances, Punjab Govt would pay Rs 20,000 crore separately !

#Punjab’s condition is a fiscal straight jacket, with no fiscal space, as committed expenditure on Salaries & Wages, Pension & Retirement Benefits & Interest Payments as percentage of Total Revenue Receipts ranged 81.45%~99.68% during 2011-12 & 2020-21, averaging around 89.63%. !

To keep afloat, the government plans to make Rs 55050 crore from debt receipts. These include market loans worth Rs 31,804 crore, loans and advances from Central government worth Rs 2446 crore and ways and means advances worth Rs 20,000 crore.

The picture is not rosy. The debt of 2.63 crore from last fiscal which is 45.88% of GSDP, debt would go up to 2.84 crore by the end of this fiscal. In addition, state agencies, boards, corporations have a debt of 55,000 crore out of which 22,250 has been guaranteed by state govt.