The Hindu Business Line : Punjab is facing ‘critical cash crunch’, says Badal

CHANDIGARH: Punjab Finance Minister Manpreet Singh Badal on Tuesday said the state is facing a “critical shortfall'' of Rs 3,000 crore in meeting its annual planned outlay of Rs 6,200 crore for 2008-09.

The state government would meet the deficit through “traditional taxes, better tax compliance and rationalising of subsidies'', he told reporters here. The annual plan size of Punjab for this year has been pegged at Rs 6,200 crore, he said, adding “thou gh ideally it should be about Rs 15,000 crore for a state like Punjab, but at the moment there was a critical shortfall of Rs 3,000 crore''.

Badal said that industrial growth of Punjab had remained “stagnant'' during the past two decades and said it could be due to various factors, including “political turmoil'' earlier, corruption and apathetic attitude of the bureaucracy towards potential i nvestors and due to tax concessions given to the neighbouring hill states.

He said despite challenges, he had set goals to improve the state's economy, which was facing a debt of Rs 57,000 crore. **I am trying to bring down the revenue deficit to zero.

Our borrowing per year from the central Government was to the tune of Rs 1,700 crore, which we brought down to Rs 1,200 crore last year and I hope that it will further come down to Rs 1,000 crore this year,'' he said, adding he would strive to make the s tate a revenue surplus and also bring down the fiscal deficit to 2.88 per cent. He stressed that Punjab will have to improve its tax collections. He, however, said that VAT collections at Rs 2,812 crore had shown 40 per cent increase during April-Augus t period this year over the corresponding period last year. – PTI

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