Will consider raising duties on fuel and liquor: Manpreet Badal, Punjab FM

Punjab would like to help the Centre in any way possible to deal with the coronavirus disease (Covid-19) pandemic, said state Finance Minister Manpreet Singh Badal. In an interview with Dilasha Seth, he says he understands the Centre’s inability to clear goods and services tax (GST) compensation dues, but has asked for payment of Rs 2,100-crore GST arrears.

With revenues drying up, he says the state has decided to put a complete stop on capital spending till August 1. Edited excerpts:

How is Punjab dealing with Covid-19? Are you deferring salaries and pensions?
 

Thanks to our large immigrant and non-resident Indian population, Punjab went into a lockdown 20 days before the country did. Because of that, we have had no sale of petrol and diesel and also no revenue from liquor, sales of property and GST. Despite that, the government has very consciously decided to pay salaries in full. From here on, we will have to see how to manage that. I need at least Rs 150 crore to fight this pandemic on the health front.
 

How will you manage state finances when revenues have dried up? Where will you cut spending?
 

We have issued a circular that we have to conserve resources. We have decided to put a stop on all capital expenditure up to August 1, be it building a railway bridge, hospitals etc.
 

Will Punjab raise duties such as VAT on petrol and diesel and excise on alcohol?
 

We will think about that, but there is no decision as of now. We will do whatever is possible. However, at this point, increasing revenues is not an option, but cutting expenditure is. We have asked the ministers to assess how much of costs they can cut.
 

Has the Centre reverted on clearing your GST dues?
 

We have asked the central government to clear Rs 2,100 crore it owes pertaining to GST arrears immediately. This is with respect to the dispute on base year revenue figures of Punjab when GST came into effect, and Comptroller and Auditor General agreed with our calculation later. Finance Minister Nirmala Sitharaman assured me in the last Council meeting that the Centre would release the dues in two or three installments. As for the compensation dues, the Centre treat us the way it is treating every other state. We can completely understand the challenge that Sitharaman is facing. She is in a very tight situation. In case they can’t give it, we will have to understand. Punjab would like to be in a situation where we could be of any help to the Centre rather than be a drag. Of all the states that went in for GST, Punjab was affected the most as we would get tax on our foodgrain. Our state was structurally damaged due to that. Therefore, compensation is very crucial to Punjab. Nevertheless, FM has assured us that the Rs 2,100 is forthcoming.
 

In your engagement with the Centre, what is it that you have asked for?
 

We have asked the Centre to increase our limit under the Fiscal Responsibility and Budget Management Act from 3 per cent to 4-5 per cent. The worry is whether our financial institutions and banks can take the weight. I see the share value of several banks on the edge, unless there is infusion the road ahead will be tough. The Centre should mobilise Rs 4-5 trillion through sale of assets. But I am not advising the Centre. These are just thoughts that have crossed my mind.
 

How is the state dealing with the situation from the healthcare point of view and the shortage of testing kits?
 

We have a good healthcare system, but we need to make emergency purchases. There is shortage of testing kits, so we are asking the Centre to these. We have constituted a purchase committee. As the saying goes, ‘jab aag lagi ho, toh mashko ke rate nahi puche jaate’ (when there is fire, you don’t ask for price of water bags).
 

The Centre has recently released State Disaster Risk Management Fund (SDRF). Is that of help?
 

There is a lot of ‘josh’ in the population of Punjab. In Bhatinda, the constituency that I am in charge of, people are donating a lot. In fact, people are spoilt for choice. It is not about hunger here. Recently, I saw that people were giving their preference of ‘paneer’ over ‘chole’ at one such distribution activity. So far, we haven’t had to touch even a single rupee given by the Centre.