State to seek fiscal package from Finance Commission

The state will be seeking an incentive package from the 15th Finance Commission for meeting all parameters of national development tasks. This package could then be used to mitigate the state’s financial woes, owing to its burgeoning public debt, settlement of the legacy food credit bill and for restructuring of its power utilities under UDAY scheme.

The high profile commission led by the chairman NK Singh and other members, including Dr Anoop Singh, Dr Ashok Lehari and Dr Ramesh Chand, will be visiting the state for four days, beginning Tuesday.

The commission members will be interacting with representatives of Panchayati Raj Institutions, urban local bodies and all political parties on Tuesday, while the state government led by CMCapt Amarinder Singh will be making its recommendations before the commission on Wednesday.

Sources said the state would be making a detailed presentation before the commission, highlighting how it had fulfilled all development index targets and also the state’s rising debt burden and the proximity to the international border with a hostile country.

“The industry does not see Punjab as a good investment destination. We are making a strong pitch for a package to mitigate the geographical drawbacks like kandi area and bet area, besides sharing border with a hostile country,” said Finance Minister Manpreet Singh Badal.

Punjab is at a disadvantage in getting devolution of funds from the Centre, which is decided by the Finance Commission.

The state’s share in central devolution of taxes has dropped from 2.45 per cent in 1971 to 1.57 per cent in 2013. This severely limits the state’s ability to engage in development and capital expenditure, said a senior finance officer. The state’s debt is expected to reach Rs 2.11 lakh crore by March-end. “While Kerala, West Bengal and Andhra Pradesh got revenue deficit grants by the past two finance commissions, Punjab was deprived of this and was removed from the category of debt stressed states,” said the officer, adding that they had pinned high hopes to get the support of the commission this time.