Budget Speech delivered by Punjab finance minister Parminder Singh Dhindsa

Chandigarh, March 7, 2014: The following is the text of Budget Speech delivered by Punjab finance minister, Parminder Singh Dhindsa in the Punjab Vidhan Sabha on Friday.
“Hon’ble Speaker Sir,
                   I deem it my privilege to present before this august House, the Vote on Account of the Government of Punjab for the period 1st April to 31st July, 2014 to meet the day to day expenditure of the various Departments. The Vote-on-Account is based on the Revised Estimates for the current Financial Year and Estimates for 2014-15. We will present full Budget for 2014-15 after the general elections to Lok Sabha in light of fresh and people friendly policies of new Central Government.
2.                          I would like to assure this august House that Shiromani Akali Dal – Bhartiya Janata Party Government led by Nation’s senior most statesman and masiha of the poor and down-trodden, Sardar Parkash Singh Badal Ji, will fulfill all promises and commitments made to the people of the State. This may take some time due to discriminatory policies of the central government. But despite all odds, we are committed to our goal of all round development of the State with special focus on weaker sections of the society without any discrimination on the basis of caste, creed or religion. Safety, security and dignity of women of the State are also high on our priority. We also stand committed to welfare of farmers, small traders, industrialists, dalits, minorities, youth and all other disadvantaged sections of the Society. Corruption free and time-bound delivery of Public Services to all citizens of the state is our motto.
3.                His Excellency, the Governor of Punjab, in his address to this august House, has already outlined various initiatives taken by our Government for the overall development of the state and welfare of its people. Before I dwell upon the Fiscal Indicators of the state, I would like to place before this august house the grim international and national economic situation. The world economic growth was 3.9% in 2011, 3.1% in 2012 and 3% in 2013. The US has just recovered from a long recession. Japan and Eurozone as a whole are reporting negligible growth rates. Growth in China has also slowed down. Indian economy is doing no better. The national growth rate has come down from 9.75% in 2006-07 to 4.86% in 2013-14. Against this backdrop, it gives me pleasure to inform this august house that the State has done fairly well as is evident from the fiscal indicators which I will dwell upon in the following paragraphs.
GROWTH RATE AND GSDP
4.                The Planning Commission estimated an average growth rate of 5.9% for the state of Punjab for Eleventh Plan period 2007-12. The State achieved an average growth rate of 6.8% during this period. As per quick estimates for 2012-13, the growth rate of the State is 4.70% against the national growth rate of 4.47%. As per advance estimates for 2013-14, State is expected to achieve a growth rate of 5.30% against the national growth rate of 4.86%.
5.                The Gross State Domestic Product (GSDP) of the State at current prices increased from Rs. 1,27,123 crore during 2006-07 to Rs.2,86,809 crore during 2012-13 and is expected to be Rs. 3,19,117 crore during 2013-14. The Per Capita Income of the State at Current Prices increased from Rs. 41,883 (National figure Rs. 31,206) during 2006-07 to Rs. 86,106 (National figure Rs. 67,839) during 2012-13 and is expected to be around Rs.94,532 (National figure Rs. 74,920) during 2013-14.
REVENUE DEFICIT
6.                The State Government is committed to eliminate Revenue Deficit of the State. But in view of high asset base of the State which leads to high maintenance expenditure, low state share in Central taxes, historically high level of Outstanding Debt and high salary expenditure of the State, the elimination of Revenue Deficit may take some more time. However, the State is moving steadily in the direction of reduction of Revenue Deficit. The average Revenue Deficit as percentage of GSDP improved from 2.91% in 2002-07 to 2.47% in 2007-12. As per A.G. Accounts for the month of December, 2013, the Revenue Deficit of the State is Rs. 2,515 crore as compared to Rs. 3,970 crore during the corresponding period of the previous year. Thus, the State has achieved significant improvement in reducing its Revenue Deficit in the current Financial Year.
FISCAL DEFICIT
7.                The average Fiscal Deficit of the State as percentage of GSDP improved from 4.18% during 2002-07 to 3.29% during 2007-12. The Fiscal Deficit of the State for 2012-13 was Rs. 9,346 crore which is 3.26% of GSDP of the State against the upper limit of 3.50% fixed by the 13th Finance Commission. The Budget Estimates for 2013-14 projected a Fiscal Deficit of Rs. 9,258 crore which is 2.90% of GSDP as against the upper limit of 3.0% fixed by the 13th Finance Commission. The Fiscal Deficit of the State during the current financial year upto the month of December, 2013 is Rs. 4,102 crore as against Rs. 5,144 crore during the corresponding period of the previous year. These figures show that the State is firmly on the path of Fiscal Consolidation.

DEBT TO GSDP RATIO
8.               The average ratio of Outstanding Debt as percentage of GSDP was as high as 46.32% during the period 2002-07. Through our Prudent Debt Management Policy, our Government has been successful in bringing down this ratio to 34.44% during the period 2007-12. The total Outstanding Debt of the State as on 31st March 2013 was Rs.92,282 crore which is 32.18% of GSDP of the State as against the upper limit of 41.0% fixed by 13th Finance Commission for the year 2012-13.
STATE’S OWN TAX REVENUE
9.                Our Government has achieved significant success in mobilizing State’s Own Tax Revenue for overall development of the State. State’s Own Tax Revenue which was Rs. 9,017 crore at the end of 2006-07 has more than doubled to Rs. 18,841 crore at the end of 2011-12. The average growth rate of State’s Own Tax Revenue which was 13.77% during 2002-07 has improved to 16.43% during 2007-12. During 2012-13 the State mobilized Own Tax Revenue of Rs.22,588 crore at a growth rate of 19.89%. The ratio of State’s Own Tax Revenue to GSDP of the State was at 7.88% during 2012-13 as compared to 7.09% during 2006-07. The target of State’s Own Tax Revenue for 2013-14 (Budget Estimates) is Rs. 28,524 crore.
FOURTEENTH FINANCE COMMISSION
10.              The major underlying cause of fiscal problems of the State is due to consistent negligence being meted out to the State since 5th Finance Commission (1970-75). The share of State in central taxes declined from 2.450% under 5th Finance Commissi0n (1970-75) to 1.389% under 13th Finance Commission (2010-15). The tax concessions given by the Government of India to the neighboring States and 553 km active and hostile border with Pakistan discourage private sector industrial investment in the State. The 14th Finance Commission headed by Sh. Y.V. Reddy, visited Chandigarh on 5th September 2013 to 7th September 2013 for meetings with State Government, representatives of Local Bodies, Trade and Industry, and Political Parties of the State. The State Government led by Sardar Parkash Singh Badal Ji, Hon’ble Chief Minister of Punjab presented a detailed Memorandum highlighting financial position and specific issues of the State before the Commission in a forceful manner.
11.               The State Government requested the 14th Finance Commission that at least 50% of Central Taxes should devolve to the States. The State Government has also demanded that weightage should be given to ST/ SC population of the State and GSDP of the State to make devolution criteria just and fair. The State has suggested to the Commission following criteria for inter-se distribution of Central Taxes amongst various States:-

12.              The State Government also requested the Commission to recommend State Specific Grants of Rs. 9,639 crore for the State for the period 2015-20. The Commission expressed its deep appreciation of the fact that State Government provided all the information required within stipulated timelines and complimented the Government of Punjab and Finance Department in particular for this work. The 14th Finance Commission is expected to give its report to Government of India in October 2014. The State expects fair dispensation from the Commission.
PLAN SIZE & PERFORMANCE
13.               There has been significant improvement in size of approved Annual Plan of the State and its implementation since 2006-07. The approved Annual Plan during 2006-07 was Rs. 4,000 crore which has increased to Rs. 16,125 crore in 2013-14. The implementation of Annual Plan was 98.30% during 2007-08, 111.51% during 2008-09, 57.67% during 2009-10, 90.98% during 2010-11, 64.73% during 2011-12 and 72.47% during 2012-13. The approved plan outlay of the State for 2013-14 is Rs. 16,125 crore.
14.              The official level discussions with Planning Commission regarding resources for Annual Plan 2014-15 were held on 16th January 2014. The Union Government has restructured the Centrally Sponsored Schemes into 66 schemes and more of the transfers will be through consolidated fund of the State from Financial Year 2014-15. Further, all Centrally Sponsored Schemes would be classified and budgeted together as Central Assistance to state plan w.e.f. Financial Year 2014-15 onwards.
15.               The resources for Annual Plan for 2014-15 have been estimated at Rs. 19,210 crore during official level discussions held with Planning Commission. The Annual Plan for 2014-15 of the State would be finalized in a meeting to be held between Hon’ble Chief Minister, Punjab and Hon’ble Deputy Chairman, Planning Commission.
Now I would highlight achievements of the Government in some important Sectors of our economy:
AGRICULTURE AND ALLIED SECTORS
16.              Punjab is a harbinger of green revolution in the country and is striving to transform agriculture from sustainable to profitable and localized to globalized. Agriculture contributes about 29% of the State’s GDP and provides livelihood to about 65% of its population. Punjab has been contributing about 50-60% of wheat and about 35-40% of rice procured by the Government of India for food security of the country for the last four decades. Progressive Punjab Agriculture Summit was held in the state wherein Agriculture Technologies were showcased and issues related to farmers and farming were debated. Major emphasis is being laid on diversification of agriculture to maize, cotton, basmati, soyabean etc. To provide maize drying facilities to the farmers, two maize dryers have been installed at Saila Khurd and Nawan Shahar. The Punjab Mandi Board has established 19 specialized Cotton Mandis with all facilities like grading labs, farmer information centre etc.
17.               For conservation of its precious natural resources like water and soil, apart from regular soil and water conservation activities, projects for “Community Micro Irrigation in Kandi-belt of Talwara and Hajipur blocks of District Hoshiarpur” and “Project for laying of Underground Pipeline for irrigation from Sewage Treatment Plants of various Towns/Cities” have been started. To wean away the farmers from burning of paddy straw, machines like happy seeders, rotavators, zero-till-drills, Balers and Rakes have been provided on 50% subsidy.
RURAL DEVELOPMENT
18.              Under Mahatma Gandhi Rural Employment Guarantee Scheme, the Gram Panchayats have succeeded in enhancing livelihood security to the people in rural areas. Kusla Gram Panchayat of District Mansa has been adjudged as one of the eleven best in the country for work done under MGNREGA.
IRRIGATION
19.              Rs 540 crore Kandi Canal Phase-II project is under implementation and is likely to be completed by March 2015. The Rs. 2,286 crore Shahpur Kandi Dam Project is likely to be completed by 2016.
POWER
20.              The visionary policies of the state Government to provide abundant and quality power to its citizens are now bearing fruit. The first unit of 660 MW of the 1,980 MW Talwandi Sabo Power Limited and the first unit of 700 MW of 1,400 MW Nabha Power Limited were dedicated to the people of Punjab on 25.11.2013 and 08.12.2013 respectively by the Hon’ble Chief Minister. Other units of these projects are being constructed at a rapid pace and will be operational within this year.
21.              Punjab has also become the first state in the country to have a 400 KV transmission system that has been developed for evacuation of power from the new thermal power projects and to improve the quality of power and reduce technical losses. This system forms a complete ring linked with two 400 KV substations of Power Grid that has connectivity with the Northern Grid allowing Punjab exchange of power with the rest of the country at high voltage. We are also making huge investments in the Transmission & Distribution system in the next five years to further improve quality of power and reduce technical losses.
GOVERNANCE REFORMS
22.              e-District Project has been successfully implemented with automated back-end process for delivery of 47 services in 2 Pilot districts of Kapurthala and SBS Nagar. Hon’ble Deputy Chief Minister, Punjab launched horizontal roll-out of this project from Mansa district for remaining 20 districts. More than 400 offices have already been connected horizontally with PAWAN network. The horizontal connectivity is being provided to 139 Departments, Boards, Corporations and Commissions in Chandigarh and Mohali.
EDUCATION
23.              The state government has successfully implemented Dr. Hargobind Khurana Scholarship scheme for brilliant students who have scored 80% or more marks in Matric. 3,304 successful students have been provided scholarship at the rate of Rs. 2,500 per month.
MEDICAL AND PUBLIC HEALTH
24.              The state has recorded an impressive performance in the important health indicators. The Infant Mortality Rate (IMR) has declined by 16 points from 44 in 2006 to 28 in 2012. The state has been awarded twice for its efforts in reduction of Infant Mortality Rate (IMR) with an incentive of Rs 216 crore from GoI. Maternal Mortality Rate (MMR) has declined from 172 in 2007-09 to 155 in 2010-12. The child sex ratio has also improved from 798 in 2001 to 846 as per census 2011.
CANCER AND DRUG ADDICTION
            
25.              The State Government has created the Punjab State Cancer and Drug Addiction Treatment Infrastructure Fund. A sum of Rs. 300 crore will be deposited every year in this Fund. Under Mukh Mantri Cancer Raahat Kosh, from 1 January, 2014, every cancer patient of Punjab will get cashless treatment for cancer upto Rs. 1.50 lac. per patient in 16 empanelled hospitals. 118 cancer drugs have been brought under Rate Contract to be provided at cheaper rates. A Cancer Treatment & Diagnosis Centre is being established at Mullanpur District Mohali in collaboration with Department of Automic energy and Tata Memorial Centre, Mumbai.
WELFARE OF SCHEDULED CASTES AND BACKWARD CLASSES
26.              The State Government has released Rs. 110 crore till date in the financial year 2013-14 for Shagun Scheme. Rs 212 crore have been disbursed under different scholarship schemes and 4,12,562 students have been covered so far during the current financial year. Free Text Books have been provided to 17,50,000 Scheduled Caste students studying in class 1st to 10th at a cost of Rs 42 crore during the academic session 2013-14.
SOCIAL SECURITY
27.              Under ‘Mai Bhago Vidya Scheme’ Rs. 40 crore have been spent to provide bicycles to 1,47,000 girl students of 11th & 12th class of government schools.
WORLD BANK ROAD PROJECT  
28.              The World Bank has approved Punjab State Road Sector Project at the total cost of Rs 1500 crore. Under Phase-I, Rs 775 crore has been spent and 712 km of road length has been constructed/upgraded.  In    Phase-II, 200 km of roads are to be undertaken under Output and Performance Based Road Contracting (OPRC).
COMMITMENT TO THE PEOPLE OF PUNJAB
29.              The leadership of Sh. Parkash Singh Badal Ji and determination of Sh. Sukhbir Singh Badal Ji has given new hope to the people of Punjab. We are committed to make Punjab once again number one State in terms of all indicators of Economic and Social Development.
30.              Sir, with these words I commend the Vote-on-Account of Rs.25,292.96 crore for first four months (April– July) of the Financial Year 2014-15 to the august House for approval.
Thank you
JAI HIND”