FM sings populist tune

Free education to all up to Class 12 in govt schools; loan waiver for landless and farm workers 6% DA arrears for govt employees, 6th pay commission to be implemented, retirement age cut to 58

CHANDIGARH : Punjab finance minister Manpreet Singh Badal on Friday made a raft of announcements, including free education for all up to class 12, implementation of 6th pay commission, release of dearness allowance arrears and loan waiver for landless and farm workers, despite rising debt.

Presenting a Rs 1.54 lakh crore budget for fiscal 2020-21, with no new taxes, Badal announced the implementation of the 6th State Pay Commission and release of 6% dearness allowance arrear while reducing the retirement age of state employees from 60 years to 58 to boost job opportunities in the government.

An allocation of Rs 4,000 crore has been made for the much-delayed revision in the pay scales of 3.5 lakh state employees and another 1.5 lakh employee of government boards and corporations. The pay panel headed by a former chief secretary Jai Singh Gill is expected to give its report in two-three months. The 6% dearness allowance arrears to state employees will mean additional outgo of Rs 1,000 crore.

“We will clear the remaining DA instalments subsequently,” the finance minister said. The budget speech was preceded by a high-voltage drama as the Akali MLAS and their supporters had gheraoed the finance minister’s residence over the issue of farmer suicides. As he got late for his speech, the state assembly was adjourned for 20 minutes and privilege motion brought against SAD legislators. The opposition AAP supported the motion.

Badal also said the employees who have turned 59 would be retired on March 31 and those who have completed 58 but still not 59 would be retired on September 30. “They are at peak pay scales. We will recruit three to four employees, young and computer savvy, in place of each one of them,” he said.

The retirement age cut, which means approximately 60,000 employees government departments and state public sector undertakings at various levels would go home in the first six months of 2020-21 with an annual attrition rate of 6 per cent, has not gone down with the government staff unions. The retirement age was increased from 58 to 60 by the Punjab government in 2013.

Badal also announced free education in government schools for all up to class 12. The facility was available to all students up to class 8 and to girl students up to Class 12 till now.

Another populist announcement is waiver of loans of landless and farm workers amounting to Rs 520 crore, which is part of allocation of Rs 2000 crore made under the ‘Crop Loan Waiver Scheme’. In his 73-page budget speech, Badal also announced waiver of change of land use (CLU) charges for entrepreneurs setting up units outside the municipal limits and cut in mandi fee levied on the sale and purchase of agriculture produce from four per cent to one per cent. He also earmarked Rs 100 crore for the Congress’ poll promise to give 10 lakh free smart mobile phones to youth in the state.

The please-all budget, which has been presented in the face of ballooning debt of Rs 2.48 lakh crore, which is 38.53% of the state’s GSPD, is being seen as the finance minister’s mid-term attempt to stem the growing criticism of the state government from within the Congress as well as the opposition parties over non-fulfilment of poll promises. Badal said the fiscal situation was under control with all financial indicators going up. “We have been able to keep the fiscal deficit at 1.20% of GSDP and fiscal deficit at 2.92% of GSDP,” he said.

While he did not outline the road map for funding his announcements, the state government is depending heavily on grants-in-aid from the Centre, which has been pegged at Rs 30,112.71 crore as per budget estimates 2020-21 as against revised estimates of Rs 21,928.46 crore for 2019-20, and increase of Rs 1,500 crore in its share of Central taxes. The state’s own tax and non-tax revenue estimates for 2020-21 are lower than the budget estimates for the previous year as there was a shortfall in collections.

They ( those nearing retirement) are at peak pay scales. We will recruit three to four employees, young and computer savvy, in place of each one of them. MANPREET SINGH BADAL, finance minister, on reducing retirement age