As the time for presenting the Punjab Budget for the financial year 2008-09 is approaching, Mr Manpreet Badal, the Punjab Finance Minister is busy in striking a balance between his party’s poll promises and economic health of the state.  As every budget in a democratic set-up like ours should target at decreasing the budget deficit and ensuring advancement of welfare policy of the government, Punjab Finance Minister should act as an independent economist rather than a puppet in the hands of the politicians. Being close to Chief Minister, he should cultivate his relationship with CM to convince him to desert the populist policies. Two major issues before him are: how to create the surplus and invest it astutely.

How to create the surplus?

Taxes are the major source of revenue for the state government. Tax rates are pretty good. There is no need to increase the tax rates. Finance Minister should map out a plan to ensure 100% tax collection. Haryana, comparatively a smaller state is far ahead in tax collection. The state like Punjab where liquor consumption is very high, excise duty collection is not as it should be. So, budget should make some provisions to plug in the loopholes in the tax collection mechanism to raise the tax collection which is around Rs 8000 Cr at present. If we have sufficient funds available, only then we can think of investing in the health and education infrastructural development.

How to invest the funds and decrease the mounting fiscal deficit?

To decrease the fiscal deficit which at present is around Rs 2200 Cr, government have to drop many freebies like free power to farm sector and BPL families, atta-dal scheme etc. 

At first, if the Punjab government really wants to help the poor farmers, it should give heavy subsidy on dip-irrigation system to the farmers so that they can water their farms with minimum water and help restore the underground water table. It will help reduce their power bills too.

Secondly, the Punjab government should make the Commission for Agricultural Costs and Prices of Government of India include the water and power costs while calculating the cost of production of wheat and rice so that MSP of the same may be raised as per their international market prices.

Thirdly, special farmers’ markets, as in the foreign countries, should be established where farmers can sell their produce directly to the end consumers on retail prices so that they can earn maximum from the trade.  Punjab government should set up government-run Kisan Seva Kenders to provide genuine seeds, fertilizers and pesticides at control rates so that exploitation by the private companies can be stopped. Punjab government should not give the farmers the fish free of cost but make them learn how to fish. Their skills should be updated so that they can repay their loans themselves.

The BPL families should be provided with free and better education and health facilities so that they can earn their livelihood and avoid begging for subsidized food from the government.

Finance minister should devise some formula to reduce corruption and increase transparency in the day-to-day functioning of the Babudom. Many of the industrialists steer clear from starting their business ventures in Punjab and are compelled to go to HP, J&K, Haryana or Rajasathan. Attractive and lucrative investment plans should be tailored by the Punjab government to fetch foreign investment. NRIs should also be cultivated at the fullest.

Finance Minister should budget for Punjab not for his party or high command. Being an intelligent young economist, he should tax his brain and have some independent steps to save the Punjab from being a beggar state. 

The end