Daily GSDP loss of ₹1,700 crore takes a toll on Punjab economy

State finance minister Manpreet Badal asks his department to come out with best-case and worst-case scenarios for better preparedness to deal with any eventuality

CHANDIGARH: Barely a month after Punjab finance minister Manpreet Singh Badal announced in his budget speech that it is back on track, the state economy has been hit by the coronavirus outbreak.

The state’s gross state domestic product (GSDP) growth rate at constant prices 2011-12, though slightly higher at 5.33% than the country’s gross domestic product (GDP) of 4.98% as per the advance estimates for financial 2019-20, is likely to see a contraction with the 21-day national curfew-like lockdown paralysing the business activity across the country.

Badal said the state’s economy was suffering a loss of approximately ₹1,700 crore every day due to manufacturing, business activity and tourism coming to a virtual halt as per the estimates made by the finance department. “Most of the revenues which accrue to the state in the form of valueadded tax (VAT) from diesel and petrol, state excise, etc. have also dropped to almost zero,” the finance minister told Hindustan

Times on Wednesday on the toll Covid-19 is taking on Punjab’s economy. He has asked the finance department to give him a presentation on the bestcase and worst-case scenarios so that the government is better prepared to deal with any eventuality.

The state had announced a complete statewide lockdown till March 31 on the day of the voluntary ‘janata curfew’ on Sunday to arrest the rising number of Covid-19 cases. A day later, chief minister Amarinder Singh imposed curfew across the state as people were defying the restrictions, making Punjab the first state to take the drastic action, before the 21-day nationwide lockdown announced by Prime Minister Narendra Modi kicked in from Tuesday midnight.

Badal, who presented the fourth budget of the present government last month, said the state would be able to weather the three-week national lockdown but anything further would start eating into capital expenditure pegged at ₹10,280 crore for financial year 2020-21.

‘STATE NEEDS TO STOP WASTEFUL EXPENSES’

“The state government will need to conserve its money and stop wasteful expenditure. With great difficulty, we had fixed the state finances by improving upon the key fiscal indicators and bringing in a culture of fiscal responsibility in the past three years after inheriting a closed treasury,” he said.

The finance minister said the state government was hoping to build on this strong foundation, but then this global calamity happened. “These are unprecedented times and no one is in a position to predict anything. But I am sure India can come out of the present situation in next three weeks. If it (lockdown) goes beyond that, India would be looking at some kind of financial emergency,” he said even as the number coronavirus positive cases rose to 31 in the state.

These are unprecedented times and no one is in a position to predict anything. But I am sure India can come out of the present situation in three weeks. If it (lockdown) goes beyond, the country would stare at a kind of financial emergency.

MANPREET SINGH BADAL, Punjab finance minister