The News Freedom
Chandigarh, October 17
In a letter written to Punjab Chief Minister Bhagwant Mann, Punjab Governor Banwarilal Purohit on Tuesday said that the state government is expected to follow prudent fiscal policies to manage its scarce financial resources. However, as per the information available, government is not managing its fiscal resources in an effective and efficient manner, he added.
Stressing on the need to avoid populist measures, Punjab Governor said that the deficit financing is an instrument, universally resorted to for boosting capital asset growth. Borrowings should ideally be leveraged for creation of capital assets and not for rolling out populist measures, he said.
“ I agree that welfare measures should be implemented comprehensively, but financial prudence demands that such welfare measures should be accompanied by fiscal discipline, resource mobilization from curbing pilferages, cutting down on unproductive expenditure and shunning fiscal profligacy,” the Governor further said.
Giving details, Purohit said that for instance, in 2022-23, the state government has borrowed Rs 33,886 crore, as against the approved amount of Rs 23,835 crore, which is over Rs 10,000 crore above the amount approved originally by the state Assembly in the Budget. This additional borrowing needs to be explained as, apparently, it has not been utilised for creation of capital assets. This is evident from the fact that the effective capital expenditure dropped by over Rs 1,500 crores from a projected Rs 11,375.59 crores to Rs 9,691.53 crores.
He further said that the additional borrowing was not even used to discharge legacy interest obligations, as per the figures projected in the revised estimates in this regard. These, in fact, demonstrate that the total payments defrayed on this account during the year finally stood at Rs 19,905 crores, as against a projection of Rs. 20,100 crores in the budgetary estimates for 2022-23.
He said that feedback from the Comptroller and Auditor General (CAG) of India, who is the custodian of the Accounts of Government of India as well of the States, indicates that there is substantial variation in the figures furnished vide your letter October 4. The CAG points out to an increase in debt by Rs 49,941 crores and capital expenditure of mere Rs 7,831 crores against Rs 10,208 crores projected in your letter. During this year, the projected levels of capital expenditure have reached only 12 percent so far, causing concern that this year too, the state will fall short of its capital expenditure targets, he added.
Giving details, he further said that to illustrate, the technical and commercial losses of the electricity utilities of Punjab, identified by PSERC, need significant reduction. Otherwise, this only means that we are actually subsidising large scale theft of electricity by unscrupulous elements. Good governance demands that such electricity theft must be curbed, and the resultant savings should be utilized to subsidize the weaker sections of the society, lest it amounts to facilitating large scale pilferage of public funds to wrongly enrich the undeserving, he further said.
While this is one illustration, now it is the high time that honest efforts are made to bring Punjab back to robust fiscal health and utilize the savings to enhance the welfare of Punjab by efficient governance accentuated by fiscal prudence. In this context, the performance of the Government is causing concern. All public borrowings should be carefully calibrated so that the youth of Punjab are not imperilled by unsustainable debt, he said.
“Can I get the accurate figures along with reasons for diverting Capital receipts for other undisclosed purposes which may please be clarified? I am asking this question for the sake of transparency. I assure you that once such a comprehensive picture is available, we can approach the Government of India for appropriate assistance as the Hon’ble Prime Minister has always expressed his commitment for Punjab, as the welfare of its magnificent people is close to his heart” the Governor further said.