DW BUREAU / Chandigarh

Punjab Finance Minister Harpal Singh Cheema said on Wednesday that the AAP government emphatically took up the state's case with regard to the targets for overall development, challenges and the requirements with the 16th Finance Commission. Cheema expressed confidence that in the light of the facts shared with it, the Finance Commission would recommend to the Union government for making provision of Rs 1,32,247 crore in respect of the state.

The Punjab government had demanded a special package of Rs 1.32 lakh crore from the 16th Finance Commission which visited the state on Monday and Tuesday. Cheema pointed out that in the memorandum given to 16th Finance Commission Chairman Arvind Panagariya, the state government comprehensively highlighted the financial condition of the state since 1980.

He mentioned that the representation was divided into 14 sections, sharing details about the state's economy, funds and future projections.

The memorandum not only included the state's demands but also outlined the Punjab government's commitments to improve the state's fiscal health, he added.

About the memorandum, the finance minister said on the basis of the Scheduled Caste (SC) population in Punjab, the state government proposed a five per cent increase in the formula of horizontal devolution for SC population against zero per cent recommended by the 15th Finance Commission.

He also highlighted the loss encountered by Punjab on account of implementation of the goods and service tax (GST).

He said according to internal assessments of the department of excise and taxation, had the value added tax regime continued, the state would have earned upwards of Rs 45,000 crore as against the budgeted GST of Rs 25,750 crore in the current financial year.

This gap is expected to magnify even further in 2030-31 with VAT estimated at Rs 95,000 crore and GST at Rs 47,000 crore, he said.

Cheema, while referring to the commitments made by the Punjab government to the 16th Finance Commission, said, "Our government vowed to increase capital expenditure to minimum 1.5 per cent of the Gross State Domestic Product (GSDP), reduce outstanding debt, increase revenue receipts further which are already above the national average and rationalisation of wasteful expenditures." Responding to a query, he said the Punjab government will not abolish power subsidies, but reduce energy production costs by opting for more and more renewable energy sources.

Giving details of the special package requested from the 16th Finance Commission for a five-year period, Cheema said the Punjab government has sought Rs75,000 crore as development grant, Rs 17,950 crore for agricultural and crop diversification to further boost farmers' income, Rs 5,025 crore for tackling stubble burning, Rs 8,846 crore to combat narco-terrorism and drug addiction, Rs 6,000 crore for revitalizing MSME industry and Rs 9,426 crore for urban local bodies. Cheema said Punjab has been facing discrimination for long, pointing out special industrial packages to Himachal Pradesh and Jammu and Kashmir while neglecting Punjab for the same.

These packages are being used to incentivise industrial migration from Punjab, with Himachal Pradesh selecting border towns like Baddi and Solan and now Jammu and Kashmir choosing Kathua on Punjab's border, noted the finance minister.
(editor@dailyworld.in)