Chandigarh, June 20: In a scathing indictment of fiscal management during the Akali-BJP rule of 10 years, the Congress government, in a white paper tabled in the assembly on Monday, said the state is in the tight grip of a debt trap and its finances in a “free fall”.
Painting a grim picture a day before the first budget of the new government, the white paper on state finances – one of the two tabled by finance minister Manpreet Singh Badal – blamed lack of fiscal prudence and indiscriminate raising of loans, especially unproductive borrowings and ‘book-cooking’, for the debt trap.
As an almost empty state treasury is a huge worry for Capt Amarinder Singh-led government, the white paper has political undertones, indicating how much to expect from the budget.
The paper puts the outstanding debt, power bonds, loans of state entities and loan to cover cash credit limit gap at Rs 1.87-lakh crore, as on March 31, 2017. If the state guarantees are added, it jumps to Rs 2.08-lakh crore.
“The state finances are in a free fall, as the government revenue has not kept pace with its expenditure, leading to ballooning revenue and fiscal deficits,” reads the 143-page white paper, summarising the fiscal woes. “A high percentage of expenditure is already committed, leaving hardly any fiscal space. It is inflicted with structural imbalance and, if no corrective measures are taken, it will take a heavy toll on the future development of the state.”
EMPTY TREASURY WORRIES CAPT GOVT
The paper notes that apart from meeting the day-to-day challenge of keeping the treasury afloat for the routine administrative expenditure, the state is constantly facing grave paucity of resources for financing the capital expenditure. “The situation is alarming.”
The Congress came to power with the promise of farm debt waiver, unemployment allowance, mobile phones, jobs and a lot of other cash-guzzling freebies.
While chief minister Capt Amarinder Singh announced debt write-off after the two white papers were tabled, his government lacks the financial wiggle room to implement most of its promises and is expected to stagger them.
In the past, too, the governments in states of Haryana, Tamil Nadu, Maharashtra and Kerala have presented white papers to bring out fiscal mismanagement of their predecessors and to defer or stagger implementation of their promises.
News Source: http://www.hindustantimes.com
