Punjab to cut down capital expenditure by Rs7,000 cr - ECAS Punjab

Punjab to cut down capital expenditure by Rs7,000 cr

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Ruchika M Khanna

Tribune News Service

Chandigarh, November 29

The Punjab Government has been forced to cut down its capital expenditure by over Rs 7,000 crore as its revenue receipts have been hit by a Covid-induced economic slowdown leading to a fall in GST collections, reduced Central devolutions and VAT collections.

This means that the money available to the state government for building its fixed assets, schools and colleges, healthcare institutions and other infrastructure, will have to be cut drastically.

The aggregate debt is expected to rise as Punjab has now agreed to opt for Central government's proposal to borrow an additional Rs 3,033 crore to meet the revenue shortfall arising out of GST compensation to be given to the state. This will mean that Punjab's debt will cross Rs 2.50 lakh crore from the estimated Rs 2.48 lakh crore.

"Though we do not agree with the option given to us as it is both unconstitutional and immoral, we had no option left as almost all other states have gone in for the proposal given to them to meet the shortfall," Finance Minister Manpreet Singh Badal told The Tribune.

He said the state had no option but to take a cut of over Rs 7,000 crore in its budgeted capital spending. In the Budget proposals, Punjab had set aside Rs 24,089 crore for its capital expenditure. "Other than the losses we are facing in our own revenue receipts, the Central devolutions have gone down drastically, besides non-payment of GST compensation," he said. Figures available with The Tribune show that the GST collections in the first two quarters of this year had declined by 30.99 per cent, Central sales tax by 18.05 per cent and VAT by 8.08 per cent. The total revenue collection was down by 18.68 per cent.

Badal said though they had to cut down on the capital expenditure, Punjab was better off than some of the other states which have had to defer payment of salaries, interest repayments and social security pensions.

from The Tribune https://ift.tt/2VfZ8ud

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