Punjab Finance Minister Parminder Singh Dhindsa on Wednesday hoped that the SAD-BJP Government with support of NDA Government at the Centre would “herald a new dawn” for the State.
“The world is upbeat about India as the economy has entered a promising era with a series of economic reforms ushered by the NDA Government at the Centre,” said Dhindsa, while talking to the media after presenting the Budget.
He said: “These times present a unique opportunity to the state to uplift its own economy by becoming a key partner in the national economic growth process…SAD-BJP alliance Government in Punjab, with support of NDA Government at the Centre, will herald a new dawn for Punjab.”
Dhindsa said the Budget had been prepared against a changed backdrop created by increased devolutions from the 14th Finance Commission and a concomitant reduction in plan transfers to States in the Union Budget.
“The steps and policies outlined in the Budget for 2015-16 presented by me reflect the commitment of the Government to put the State economy on path of sustained and high economic growth, the benefits of which will reach all sections of the society,” he said.
Dhindsa said the Budget also laid down the steps to steer State towards the course of prudent fiscal consolidation and industrial development. “While we chart the course of Punjab’s economic progress, we are mindful of the diverse challenges facing the State like drug abuse, adverse child sex ratio, rising incidence of cancer, fiscal stress and unemployment in youth,” he said.
According to the advance estimates, the GSDP at current prices is estimated to grow at 10.16 per cent in the current fiscal. “During 2013-14, GSDP at constant prices grew at 5.73 per cent against the national growth rate of 4.74 per cent. Per capita income of the state at current prices is also estimated to increase from Rs 92,350 in 2013-14 to Rs 99,578 in 2014-15,” he added.
He said that to promote growth by judicious use of scarce resources and to achieve intergenerational equity, fiscal discipline is of utmost importance. “The government is taking all steps to ensure that it lives within the means and thereby stabilize its deficit and debt position,” he said.
Dhindsa said 14th Finance Commission had increased Punjab’s share in Central taxes from 1.389 to 1.577 per cent, adding that the Commission had also removed the State from the list of States needing revenue deficit grant. Punjab was well within limits of most of the fiscal targets set by the 13th Finance Commission and under the FRBM Act, he said.
“The fiscal deficit came down from 3.45 per cent of GSDP in 2006-07 to 2.77 per cent of GSDP in 2013-14 and is estimated at 2.97 per cent of GSDP in 2014-14 (RE) well within the 13th Finance Commission target of 3 per cent. For the year 2015-16 (BE), the fiscal deficit of the state government is projected at 2.98 per cent of GSDP,” he said.
Dhindsa added the diligent efforts of the State had enabled it to keep debt within manageable limits as is reflected in rapid decline in debt to GSDP ratio. He said reduction in revenue deficit remained a challenge for the State in the wake of the implementation of the fifth Punjab Pay Commission recommendations, which saw a significant increase in its committed expenditure on salaries and pensions.
Due to sustained efforts of government, the state’s tax revenue to GSDP ratio as also the non tax revenue have increased in recent years, Dhindsa said. However, declining share of Punjab is central taxes had constrained the overall resource position of the state. “This situation though is set to take a better turn now with the latest 14th Finance Commission recommendations which resulted in increased devolution albeit at the cost of reduced plan allocation,” he added.