Punjab govt introduces new tax for salaried class in FY 2018-19 Budget

Chandigarh: The Amarinder Singh-led Punjab government on Saturday proposed a development tax of Rs 200 per month on income tax payers as the budget for 2018-19 focused on fiscal consolidation, with the state finance minister exuding hope of putting the economy back on rails over the next two years.

The budget's key focus areas remained agriculture and farmer welfare, industry, health, employees, and students.While presenting the second budget of the Congress government, Finance Minister Manpreet Singh Badal said, "We have tried to mobilise resources and cut down on expenditure".

The total budget size was kept at Rs 1,29,698 crore, though the effective budget size is Rs 1,02,198 crore.

Manpreet Badal proposed raising Rs 1,500 crore through additional resource mobilisation measures. He further informed the Assembly that the government has decided to bring in a legislation for imposing a "nominal development tax" at the rate of Rs 200 per month "only on the Income Tax payees who are engaged in professions, trades, callings and employments".

The new tax will be called 'Punjab Development Tax', under which government is hoping to garner Rs 150 crore annually. As the state goes for resource mobilisation, Manpreet said the move will help the state access cheaper loans from institutions like Asian Development Bank.

"Many of the progressive states like Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Tamil Nadu have been collecting such tax for development for a long time.

"The state also intends to bring in a new Social Security legislation to create a dedicated fund to meet its commitment towards the weaker sections of the society," he said in his budget speech.

In the education sector, the state will provide all requisite text-books free of cost to students of Class I to Class 12th studying in government schools during 2018-19, for which Rs 49 crore has been provided for.

The government will provide free sanitary napkins to all girl students from Class 6-12th in all government schools with an objective to promote menstrual hygiene and reduce dropout of girl students.

All municipal towns/areas would be made Open Defecation Free by June 30, 2018, under the Swachh Bharat Mission.

Manpreet informed that the total outstanding debt of the state is Rs 1,95,978 crore, which is 41.04 percent of GSDP for 2017-18. The outstanding debt liability is likely to be Rs 2,11,523 crore in 2018-19, 40.82 percent of GSDP.

The debt servicing (principal plus interest) for 2018-19 is a whopping Rs 24,870 crore as against the allowed net borrowing limit of Rs 15,545 crore approved by Government of India for financial year 2018-19.

Manpreet said the only way left for government is to mobilise more revenue while at the same time cutting down on our non-committed expenditure.

Manpreet Badal's budget speech was disrupted for a while by slogan-shouting opposition MLAs of Akali Dal and Aam Aadmi Party, who protested near the Well of the House and later walked out alleging that the Congress government backed out from its promise of complete debt waiver made to farmers.

"..We have been able to contain the fiscal deficit to 4.36 percent during 17-18 as compared to 12.18 percent for 16-17," he said, adding this has been targeted to be 3.81 percent in 2018-19 in the given circumstances of "huge committed liabilities".

The state's revenue expenditure rose from Rs 55,296 crore in 2016-17 to Rs 71,183 crore in 2017-18 and during the same period, expenditure on salaries, wages, and grand-in-aid has risen from Rs 21,729 crore to Rs 24,938 crore, and on pensions from Rs 8,773 crore to Rs 9,469 crore, he said.

The expenditure on interest payments rose from Rs 11,642 crore to Rs 15,175 crore. The total revenue expenditure on these committed liabilities is itself 87 percent of total revenue receipts of state during 2017-18.

"Despite my best efforts, I have only been able to peg the revenue deficit at 2.42 percent of GSDP in 2018-19. However, we remain committed to reducing this deficit consistently and getting the state into an era of revenue surplus," he said.

During 2017-18, the GSDP of the state has increased from Rs 4,33,660 crore in 2016-17 to Rs 4,77,482 crore, and it is projected to increase to Rs 5,18,165 crore in 2018-19.

The per capita income of the state has also increased from Rs 1,31,112 in 2016-17 to Rs 1,42,958 in 2017-18 and is 28 percent higher than the national average of Rs 1,11,782, he said.

Touching on farmers' welfare, Manpreet said that the total outlay for the year 2018-19 has been increased from Rs 10,581 crore (17-18) to Rs 14,734 crore.

On the Congress government's key poll promise of debt waiver, an amount of Rs 4,250 crore has been proposed for implementation of this scheme during 2018-19. During 2017-18, Rs 370 crore had been disbursed to 71,166 marginal farmers.

"The focus of this government is the farmer of the state and we have decided that our policies on agriculture and rural economy shall be centered only on the welfare of farmer," he said.

Free power is being provided by the state government to farmers and subsidised power to SC, BC, and Non-SC-BPL category and a provision of Rs 8,950 crore is being made in the budget 2018-19.

 

(With PTI inputs)