CHANDIGARH: The grants-in-aid to the Punjab Government from the Union Government has declined by half between the first quarter of the current financial year compared to the corresponding period last year.
The revenue deficit grant which the 15th Finance Commission supposed to provide, was not received by the State, resulting a gap in revenue receipts.
Sources said that as per the fiscal indicators of the first quarter of this fiscal, the State government received Rs 793.74 crore as grants-in-aid. Last year, in the same period, it got Rs 1,471.99 crore marking a decline of Rs 678.25 crore.
A total of Rs 25,968 crore grant from 2021 to 2026 was given by the Commission. In the first two years, the State got maximum grants in 2021-22 of Rs 10,081 crore, Rs 8,274 crore in 2022-23. In 2023-24, it got Rs 5,618 crore, and in 2024-25, the State received Rs 1,995 crore and this year, nothing.
It has impacted the total revenue receipts of the state government, which, though higher than the first quarter of 2024-25, is lower than the targeted receipts.
Between April to June this year, the revenue receipts were Rs 22,938.23 crore, which is just 20.04 per cent of the total targeted revenue of Rs 1,11,740.32 crore for the entire financial year.
Always, the revenue collection is higher in the first quarter of the year, said sources.
It is learnt that the tax revenue and non-tax revenue collected in the first quarter though is higher than last year, it is 25 per cent less than the target.
While the tax revenue is Rs 19,610.18 crore which is 22.05 per cent of this year’s target and non tax revenue is Rs 1,994.31 crore, which is 16.33 per cent of the target. The revenue expenditure has gone up by Rs 1,352 crore from Rs 29,024.39 crore last year to Rs 30,376.93 crore between April-June this year.
Thus, the net result is that the borrowing limit of the State in the first quarter has increased over the first quarter of last year by Rs 327.03 crore. Between April and May the government raised loans of Rs 9,365.25 crore.
Sources pointed out that the grants-in-aid are not loans that the state needs to repay but are devolutions made to state governments by the Central government for specific projects.
The revenue deficit grant or post-devolution revenue deficit grants are given to States to cover the gaps in revenue accounts.