DW Bureau / Chandigarh
Grappling with precarious fiscal health and mind-boggling debt burden of Punjab, the top mandarins in the Capt Amarinder government are all set to suggest to the State government to look for a ÔÇ£political solutionÔÇØ by approaching the Centre with a road map for the State on good governance and reforms to come out of the financial quagmire.
ÔÇ£The problem has been created over decades by politicians and the situation is now beyond a bureaucratic solution. The only way out for Punjab to tide over this fiscal crisis is to convince the Centre and obtain a political solution,ÔÇØ a top government functionary dealing with the StateÔÇÖs finances told Daily World on Tuesday.
He said the State was already burdened with a staggering Rs 2.5 lakh crore debt and had not too much option to maneuver to mop up additional revenue when most revenue earnings get gobbled up paying salaries, pensions and debt servicing. ÔÇ£With the GST regime coming into force, our capacity to tweak with tax rates will draftically get limited. The State is expected to get into further financial constraints after pressure mounts on it to implement the 7th Pay Commission and its poll promise on waiver of farm loans,ÔÇØ the functionary added.
It may, however, not be easy for Capt Amarinder Singh and his team to convince the Modi Government and get a special package since the perception in Delhi is that the entire financial problem of the State is of its own making. ÔÇ£There is a limit to which you can burden people with taxes or cut wasteful expenditures,ÔÇØ the functionary said adding when most revenues are gobbled up in paying salaries, pensions and debt servicing and all expenditures are non-discretionary, there is not much that can be done. There is dire need of creating a fiscal space in which the Punjab government can move into tide over the present fiscal crisis,ÔÇØ he added.
A finance department official informed that the total outstanding debt of the State which was earlier pegged at Rs 1,81,727 crore is expected to be Rs 2.5 lakh crore on account of deferred liabilities and operative liabilities such as loans taken by organizations like the PIDB, GMADA, PUDA, Mandi Board and the PSPCL.
ÔÇ£All stakeholders in the game are responsible for the mismanagement, and unfortunately have shown large heart at all wrong places, he said adding that the salaries of employees in Punjab are 20-25 per cent more than Central government employees whereas the salaries of PSPCL employees are 15 per cent more than even Punjab government employees. ÔÇ£The time bomb is tickingÔÇØ and it wonÔÇÖt be easy for the State to tide over the current financial crisis till a political solution is found by our government,ÔÇØ the official added.