Punjab CM Amarinder Singh asks departments to rationalise expenses

Punjab Chief Minister Amarinder Singh on Monday asked all government departments to rationalise their expenses, flagging the impact of the coronavirus crisis on the state finances.

He, however, said the power subsidy to farmers will continue and stressed on timely payment of salaries. The situation is unlikely to improve in the immediate future, the Chief Minister warned, citing the continuously declining in collections of the state and the worsening COVID situation in the country.

With studies and reports from around the world presenting a grim picture on the COVID outlook, the projections are not good, the CM said during a video conference with the Empowered Committee of Cabinet on Fiscal Management, as per a government release.

The CM made it clear that the capital expenditure in essential sectors such as health, education and infrastructure will be retained at Rs 5,000 crore, notwithstanding the economic crisis faced by the state, which is expecting a shortfall of nearly 30 per cent in the total revenue receipts in the 2020-21 financial year.

The CM said the focus of his government was on ensuring that salaries and pensions continue to be paid on time, along with the power subsidy to farmers.

No compromise can be made to ensure funding for all frontline departments, such as health, police and the local bodies, which are working round the clock in battling the disaster, he added.

The CM said despite a shortfall iin revenue and an urgent need to borrow, the power subsidy to farmers will continue. He said there was no question of accepting the condition to replace it with direct cash transfer for availing the additional borrowing limit allowed by the Centre.

This so-called power reform is violative of the country's federal structure, he said, adding that he would write to the Prime Minister on this issue as the Union government cannot put conditions on states for availing loans.

He said the recent ordinance on agricultural reforms can further pave a way for the elimination of the MSP regime. Earlier, the meeting took a stock of the state's deteriorating fiscal situation, which showed a drastic decline in receipts since the beginning of the financial year.

For April 2020, the decline in revenue receipts against the budget estimates was 12 per cent, which went up to a whopping 37 per cent in May, aggregating to a total of 25 per cent of the budget estimates for these two months.

The state's own receipts came down to a mere Rs 396 crore in April amid the total lockdown, with total receipts for the month standing at Rs 6,797 crore, followed by Rs 3,891 crore in May (state's own receipts at Rs 1,252 crore).

In fact, total receipts (inclusive of Rs 4,200 crore of market borrowing) have been an abysmal Rs 15,882 crore from April to June 5, 2020.