Punjab seeks fiscal stimulus of Rs 51,102 cr from Centre

Published: May 27, 2020, 7:21 pm IST

Chandigarh: Amid mounting economic woes, the Punjab government on Wednesday decided to seek a fiscal stimulus of Rs 51,102 crore from the Centre to help the state tide over the financial crisis triggered by the Covid-19 pandemic and the prolonged lockdown that ensued.

A draft memorandum to this effect was approved by the Council of Ministers, at a meeting chaired by Chief Minister Amarinder Singh.

The Cabinet also authorised the Chief Minister to make necessary amendments to the draft memorandum before submitting it to the Government of India.

In addition to the direct fiscal stimulus of Rs 21,500 crore, the state plans to seek waiver of the long-term CCL debt as imperative for the fiscal recovery of the state government.

Additionally, all Central schemes should be 100 per cent funded by the Central government for this fiscal, as per the draft memorandum.

According to an official spokesperson, listing health infrastructure as a key priority in the post-Covid scenario, the state proposes Rs 6,603 crore for improvement of public health infrastructure from a long-term perspective.

This also included sanction for setting up of an advanced centre of virology at a cost of Rs 650 crore, for which the state has already offered the required land free of charge.

To contain the Covid-19 contagion in the rural areas, assistance of Rs 5,068 crore has been sought in the draft memorandum for liquid and solid waste management in the villages, in addition to the upward revision of capital outlay and targets under MGNREGA.

The memorandum seeks Rs 12,560 crore for the agriculture and farming sector, mainly for upgradation of farm infrastructure, providing income support, interest subvention etc., with an additional amount of Rs 1,161 crore identified as assistance needed for the animal husbandry and dairy sector.

For urban development, the state has proposed a National Urban Employment Guarantee Act (NUEGA) to guarantee employment in urban areas, along with an additional capital outlay of Rs 2,302 crore under schemes like AMRUT, Smart City, PMAY etc., with certain relaxations.

This is in addition to a grant of Rs 1,137 crore on account of revenue loss.

The Cabinet took note of the fact that the lockdown has jeopardised the concerted efforts of the state for achieving fiscal consolidation over the past three years.

While the Government of India has considerable fiscal leverage, the state governments have extremely limited fiscal space, especially after the implementation of the Goods and Services Tax, it noted.

Punjab is one of the highest debt-stressed state in the general category states i.e. Punjab’s outstanding debt to the GSDP ratio is 40.7 per cent, which is significantly higher than Maharashtra (17.9 per cent), Karnataka (18.2 per cent), Gujarat (20.2 per cent), Tamil Nadu (22.3 per cent), Andhra Pradesh (28.9 per cent), Kerala (30.9 per cent) and West Bengal (37.1 per cent).