Older does not necessarily mean wiser, or richer.
Given that Haryana was carved out of it in 1966, Punjab may pride itself as the “older brother,” but the much younger sibling is way ahead on most economic parameters — per capita income, revenue generation, lower fiscal deficit, tax mobilisation and controlling debt liability. The extent of Punjab’s financial mismanagement can be gauged from the fact that the state cabinet is toying with the idea of raising the retirement age of all employees to 60 because it is finding it hard to foot the salary bills. In June 2013, the state had to resort to market borrowing to raise Rs 500 crore to pay its staff. The monthly salary, pension and retirement benefits bill of the state is Rs 1,681 crore.
Haryana even has a bigger total Plan outlay of Rs 20,352 crore, while Punjab’s outlay is just Rs 15,500 crore.
Revenue deficit, a vital indicator of the state’s financial health, shows Punjab’s fiscal deficit as 3.28 per cent of GSDP in 2011-12 and 3.17 per cent in 2012-13. In comparison, Haryana remained a revenue surplus state from 2005 to 2008, and even now the deficit is less than one per cent of GSDP.
In the last 12 years, Punjab has never been able to turn into a revenue surplus state. The state, which has been facing severe criticism for spiralling borrowings, has witnessed its debt grow to Rs 95,670 crore (without reserve funds) for 2013-14. Heretoo, Haryana fares better with a debt liability of Rs 67,772 crore in the corresponding period.
Another worrying trend in Punjab is VAT collections in the first quarter grew by just 12 per cent, against a target of 25 per cent, while the revenue from stamp duty and registration of land grew just 8 per cent, against a target of 16 per cent. In comparison, Haryana’s collection of VAT up to May 2013 was over Rs 2,844.09 crore, which was 3.5 per cent higher compared to the collection the previous year.
Haryana recorded a growth of 6.45 per cent in total revenue collection at Rs 4,061.34 crore during April-May, said state Excise and Taxation Minister, Kiran Choudhary.
When it comes to Punjab, the mismatch between income and expenditure could be gauged from the fact that as against an average income of Rs 3,300 crore a month, the state spends Rs 3,800 crore.
CAG in its latest report has asked Punjab to utilise debt receipts for assets creation as the state was utilising a major portion of borrowings for repayment of past debts.
Deputy Chief Minister Sukhbir Singh Badal, who is also Excise and Taxation Minister, however, insisted there was no fiscal crisis, adding that besides VAT, excise collections had actually picked up in September.
As far as per capita income was concerned, in 2012, Haryana stood at number three nationally with a per capita income of Rs 1,09,227 while Punjab was in 7th spot with a income of just Rs 69,737.
The quality of expenditure is good as committed expenditure of Haryana is 28 per cent of total revenue expenditure in comparison to Punjab’s 45 per cent. According to estimates released by the Department of Economic and Statistical Analysis, the Gross Domestic Product of Haryana was Rs 3,53,440 crore, a growth of 14.9 per cent.
The break-up of tax revenue in Haryana reveals that sales tax was the major source of revenue and was estimated at Rs 16,450 crore in 2012-13 as compared to Rs 14,100 crore in 2011-12 and Rs 11,082.01 crore in 2010-11. Sales tax collection increased by 16.67 per cent in 2012-13.
The contribution in tax revenue from state excise was Rs 3,000 crore in 2012-13 compared to Rs 2,800 crore in 2011-12. The contribution in tax revenue from stamps and registration was Rs 3,000 crore in 2012-13 as compared to Rs 2,800 crore in 2011-12.
Haryana’s Excise and Taxation Department collected revenue of Rs 19,703.64 crore in 2012-13 against Rs 18,077 crore collected during 2011-12.
The Finance Department has set a target of Rs 23,500 crore for revenue collection for the year 2013-14, Kiran Choudhry said.
Meanwhile, Punjab has restored Leave Travel Concession (LTC) for its employees with effect from September 1. The travel concession for the block 2010-13 was suspended temporarily on August 29, 2012, as an austerity measure.
Said Punjab’s Principal Secretary (Finance) D P Reddy: “Our financial condition is improving.”
Despite repeated attempts, Principal Secretary (Finance) of Haryana Rajan Gupta could not be contacted for comment.
The Sunday Standard