Akali challenge: meeting promises

SAD election promises are expected cost the state exchequer about Rs 2,000 crore.

The Shiromani Akali Dal (SAD),which returned to power today,may have to come up with innovative revenue generating measures to fulfill the election promises that are expected cost the state exchequer about Rs 2,000 crore.

This is in addition to bills worth Rs 1,700 crore pending with the treasury since December. The states various boards and corporations have borrowed from banks against future earnings to run schemes to provide subsidised atta-dal,link roads in villages and free power to farmers.

The state has to improve its tax collection machinery and also create new avenues for raising revenues,said experts. For instance,the Akalis may have to bite the bullet on charging house tax at urban centres.

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So far,the states innovation in mopping up funds has been restricted to sale of prime government land and increasing the taxes and cess on foodgrains.

The SAD manifesto has promised laptops with data cards for class 12 students in government schools and free bicycles to girl students of classes 9 and 10. Besides,it said the gift amount under Shagun Scheme would be more than doubled to Rs 31,000.

All this could have been just fine had the state enjoyed revenue surpluses. Its Budget Estimate for 2011-12,however, projects a revenue deficit of Rs 3,387 crore (1.3 per cent of the gross state domestic product) and states own tax revenue to gross state domestic product ratio at a low 7.5 per cent.

The Akalis promised 2 lakh jobs a year or 10 lakh over the next five years. Youth will be entitled to Rs 1,000 a month unemployment allowance. The manifesto also said boys and girls belonging to some 16 lakh poor families will get free education up to class 12 and free medical cover worth Rs 2 lakh. The expenses for providing the health insurance will be met from the five per cent revenue accruing to the state from the earnings of two super speciality hospitals of Max Healthcare at Mohali and Bathinda.

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Those without land are to get free five marla (1 marla is 25.29 sq m) plots. The Punjab budget last year had earlier offered this sop to girl students of class 11 and 12.

The state will also have to muster political will to hike power tariff to make good at least a part of the Rs 8,900 crore revenue gap of its beleaguered power corporation. It may also have to charge rich farmers for power.

While the Akalis have promised many freebies,they also hoped to increase the total revenue of the state by 300 per cent over the next five years. The BJP opposes the power tariff hike on urban domestic users and industry every year, says Sucha Singh Gill,an economist. Its time the state mustered the political will to charge all consumers instead of promising free power.