Punjab’s fiscal health ‘poorer’ than Haryana’s

Punjab may have been trying "hard" to bring fiscal discipline but when its fiscal health is compared with that of Haryana,the neighbouring state is found to be performing better.

Punjab may have been trying “hard” to bring fiscal discipline but when its fiscal health is compared with that of Haryana,the neighbouring state is found to be performing better.

On the most of fiscal parameters,including revenue,fiscal deficit,tax mobilisation and debt,Haryana¿s fiscal situation is better than that of Punjab,as per budget documents of both the states.

Where Punjab is “struggling hard” to bring down its “rising” revenue deficit (difference between revenue receipts and revenue expenditure),Haryana’s revenue deficit has been well below one per cent of GSDP since 2011-12.

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Punjab’s revenue deficit to GSDP ratio was 2.63 per cent for 2011-12 against the target 1.8 per cent as per Fiscal Responsibility and Budget Management Act,2011. In 2010-11,its revenue deficit was 2.35 per cent of GSDP.

Although it has now set an ambitious target of achieving revenue deficit of 0.57 per cent of GSDP for 2013-14.

Notably,Haryana has consistently followed the targets set out in FRBM Act 2005 and remained a revenue surplus state for a period starting from 2005-06 till 2007-08. Punjab in last twelve years had never been able to turn into a revenue surplus state.

Punjab’s fiscal deficit as percentage of GSDP is projected to come down from 3.28 per cent in year 2011-12 to 3.17 per cent in 2012-13 and then 3 per cent (Budget Estimates) in 2013-14.

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On the contrary,Haryana’s ratio of fiscal deficit to GSDP is proposed at 2.2 per cent (BE) in 2013-14,dipping from 2.3 per cent in 2011-12.

The Punjab government had already admitted that if the state failed to meet targets of revenue deficits,fiscal deficit and debt to GSDP ratio,then it would be losing Rs 500 crore every year from the Centre.

Punjab,which has been facing severe criticism for spiraling borrowings to meet its expenditure,has proposed its debt to grow to Rs 95,670 crore (without reserve funds) for 2013-14 in the budget which was presented by Finance Minister Parminder Singh Dhindsa on March 20.