In a rare and significant display of political unity, Punjab's major political parties — Aam Aadmi Party (AAP), Congress, Shiromani Akali Dal (SAD), Bharatiya Janata Party (BJP), Bahujan Samaj Party (BSP), among others — converged to present a consolidated set of demands before the 16th Finance Commission to address the state's pressing financial and developmental issues, emphasizing the need for special grants and reforms to ensure equitable growth and sustainability.
All the political parties, unequivocally, raised the demand for increased share of central taxes, with other demands like special grants and schemes, historical grievances, tax structure reform, debt waiver for farmers, resolution of state’s pending dues, also finding voice in the meeting.
The Finance Commission, led by chairman Dr Arvind Panagariya, was on Monday in Punjab to gather input on the state’s economic needs and challenges.
The political parties jointly urged the Finance Commission to raise the state’s share of central taxes from the current 41 to 50 percent — an adjustment seen as essential due to the introduction of GST, which has altered revenue distribution, impacting the state’s financial resources.
The parties have also requested additional funds for various sectors, including agricultural diversification. An extra Rs 10,000 crore has been sought to support crop diversification, promote horticulture, and enhance food processing capabilities; increased funding for rural and urban infrastructure projects; special grants for social welfare programs and educational institutions; besides additional resources to improve healthcare facilities and medical services.
Emphasis was also placed on the need for economic development initiatives, particularly in industrial and infrastructure sectors, to stimulate growth and create employment opportunities.
The parties have also called for the resolution of historical issues, such as the compensation for water provided to Rajasthan as per the 1955 inter-state agreement and the transfer of Chandigarh to Punjab, along with settling income discrepancies related to Haryana’s failure to vacate the capital.
SAD has specifically advocated for a revision of tax devolution formulas to better accommodate Punjab's unique challenges, including border security costs and higher expenditure on internal security due to cross-border issues. It also proposed a debt waiver for farmers, citing the state's high public debt and the financial strain on the agrarian sector. They also requested a regular grant for compensating border farmers and tax concessions for industry.
SAD also highlighted the need for releasing pending funds from the Rural Development Fund (RDF) and the Sarb Sikhya Abhiyan, which are critical for maintaining rural infrastructure.
The parties have urged the Commission to support measures for groundwater conservation and enhance canal water usage to address the critical issue of water depletion.
Led by former Cabinet Minister Vijay Inder Singla, the Congress delegation submitted a comprehensive memorandum to the Finance Commission echoing broader demand of increasing state share of central taxes to 50 percent; acknowledging the adverse impact of GST on Punjab’s revenues, particularly from the loss of purchase tax on agricultural goods; besides a request for additional funds to support agricultural activities and mitigate the effects of water scarcity.
