₹25,968-crore revenue deficit grant recommended for Punjab
CHANDIGARH: The 15th Finance Commission headed by former bureaucrat NK Singh has recommended a revenue deficit grant of ₹25,968 crore for Punjab from 2021-22 to 2025-26.
The revenue deficit grant will be provided by the Centre, which has already incorporated the panel’s recommendation for 2021-22 in its budgetary provisions, to cash-strapped Punjab over the next four years. The state’s post-devolution will follow a declining trajectory, gradually reducing from ₹10,081 crore in the first year to ₹1,995 crore in the fourth year of the award period, before attaining a post-devolution surplus of ₹5,260 crore in 2025-26, according to the final report of the 15th Finance Commission tabled in the Lok Sabha by Union finance minister Nirmala Sitharaman on Monday.
Punjab is the among the 17 states for which the 15th Finance Commission, a constitutional body having the mandate to determine the shares of the Centre and states in taxes, has recommended revenue deficit grants totaling ₹2,94,514 crore over the five-year period. West Bengal, Andhra Pradesh, Himachal Pradesh, Kerala and Uttarakhand are the five states for which grants-in-aid higher than Punjab have been recommended for revenue deficit. Earlier, the commission, in its interim report, had recommended a revenue deficit grant of ₹7,660 crore for the state for 2020-21. In comparison, Punjab was not among the 11 states that were identified by the 14th Finance Commission in 2015 for receiving revenue deficit grants.
Share in central taxes up
Another good news for the cashstrapped state in the report submitted by the finance panel to President Ram Nath Kovind last November is the increase in its share of the central taxes to 1.807% from 1.577% decided by the previous finance panel. The state’s share was 1.389% before that. Punjab’s finance minister Manpreet Singh Badal said the last two Finance Commissions had not given any revenue deficit grants to Punjab which was very unfair. “Punjab is one of the highest deficit states and we presented the state’s case to the 15th Finance Commission strongly in a structured manner,” he said, thanking the panel.
The Amarinder Singh government had, during an interaction with the 15th Finance Commission team here in January
2019, sought a special debt-relief package to revive the state’s fiscal health and a hike in its share in devolution of central taxes, besides objecting to the industrial concessions to neighbouring states.
The total transfers, including share in central taxes and duties, have been pegged at ₹120,339 crore during the award period, including grants of ₹10,305 crore for local bodies, ₹2,736 crore for disaster management, ₹902 crore for health infrastructure, ₹1966 crore for agriculture and ₹156 crore for higher education, besides statespecific grant of ₹1,545 crore for state-specific special needs.