The Congress Government in Punjab is apparently convinced that the BJP Government at the Centre will bail the State out of its worst ever financial crisis within a fortnight by resolving the GST (Goods and Services Tax) compensation issue.
Punjab Finance Minister Manpreet Singh Badal on Wednesday expressed complete confidence in the Union Finance Minister Nirmala Sitharaman’s words that strict instructions have been issued to the Department’s Joint Secretary to pay arrears of `2,100 crore to the State by December 18.
“We six Finance Ministers met the Union Finance Minister today and our main agenda is the pending GST compensation which has not been paid to the State since August. Now, we have entered December, and we have not been paid compensation for past four months,” said Manpreet after the Cabinet Meeting on Wednesday evening.
“We discussed the issue with the Union Finance Minister. Even the compensation for the next period (October-November) is due now. The Central Government is under obligation to pay,” said Manpreet adding that we have told her that it was embarrassing to come and ask for money.
“We had an open and frank discussion with the Union Minister…I told her that we can't close schools, hospitals, jails….We need to pay pensions...States have many responsibilities…Centre can print currency, we can’t. You can increase borrowings, but States have a limit,” said Manpreet.
Manpreet added that the Ministers had requested the Union Minister “to release the GST compensation of at least two months, that is August and September. And besides that, I requested to release `2,000 crore arrears of the State pending with the Centre”.
Maintaining that Sitharaman gave them a patient hearing, Manpreet said that she assured that the pending dues would be cleared soon, and issued strict instructions to the Joint Secretary to clear Punjab’s arrears amount by December 18.
“India’s Finance Minister’s assurance is just like a guarantee…I am ready to believe her…I am ready to wait for 14 days,” said Manpreet.
Notably, Punjab GST dues are worth Rs 4,100 crore. Besides, Rs 850 crore on account of state’s share of central taxes is also pending. The GST compensation is to be paid every month.
Chief Minister Capt Amarinder Singh on Monday had also reviewed the state’s slippery financial situation. An assessment of each department’s performance in tax collection (state’s own tax collection), slow excise collections (44 percent of the total excise revenue of Rs Rs 6,201 crore for this fiscal), stamp duty collections (52 percent of the target of Rs 2,650 crore for this fiscal), sales tax (49 percent of the target of Rs 6,353 crore) were discussed.
The non-tax revenue collection till October is just Rs 1,576.23 crore, as against a target of Rs 9,476.98 crore.
The sloppy financial situation has led to delay in employees salaries leading to widespread protests. “We have released employees salaries, and also salaries of Powwrcom employees,” said Manpreet.
Manpreet pointed that the previous SAD-BJP regime had agreed to subsume 23 percent of revenue coming from the taxes on foodgrains for the GST implementation. “I pointed this to the Union Minister and she maintained that she understand our pain, and assured to resolve the issue at the earliest,” he added.