Punjab is one the most fiscally stressed states, having the lowest level of capital expenditure, an expert panel stated in its recently submitted report. The Group of Experts, headed by noted economist and former deputy chairman of the Planning Commission Montek Singh Ahluwalia, was set up by Punjab Chief Minister Captain Amarinder Singh last year, to suggest measures for economic revival of the state. The panel submitted its final report to the CM recently.
The panel has proposed undertaking immediate measures such as reducing the average cost of government debt, banning recruitment in police, bringing pay scales of state government employees at par and increasing deduction towards professional tax, among others.
The experts have told the government that unless stringent measures are enacted to correct the fiscal situation in the coming years, Punjab cannot regain its lost glory and the pre-eminent position it once enjoyed. Despite being quite vocal about these measures, the Group of Experts did not comment on the issues of power subsidy and farm loan waiver.
The experts’ panel has recommended the formation of another Group of Experts for preparing a long-term fiscal adjustment strategy. The long-term strategy should be implemented over the next five years. "In this period of implementation, the long-term strategy is expected to be a guide to resource availability over this period and the scope for capital investment consistent with the objective of reducing the fiscal deficit," the Group of Experts said.
The panel also said it is not possible for the government to bring about a structural improvement in the state’s financial situation due to the pandemic. However, a concerted effort needs to be launched once post-pandemic normalcy is achieved.
(Edited by : Shoma Bhattacharjee)
First Published: IST