Central Grants to Panjab Down 61%, Deficit Up

Over the last year, the Center slashed cash-strapped Panjab’s grants-in-aid and contributions by almost 61%. This led to a significant rise in Panjab’s revenue deficit. The fiscal indicators for the first half of the year indicate the grants-in-aid and contributions from the Center this year is just $590M as compared to $1507M last year. The state’s total revenue receipts between April and September dwindled from $4985M in 2022 to $4778M in the corresponding period of this year. Panjab Finance minister Harpal Cheema said, ‘The decline in grants-in-aid and contributions from the Center is responsible for the slow growth of revenue. Being a state ruled by an Opposition party, the BJP-led Center is showing its bias in releasing grants.’ Besides market borrowing to raise funds, the Panjab Cabinet on 6 Nov approved the Panjab One Time Settlement (OTS) Scheme for pre-GST arrears, thereby benefiting more than 60,000 traders. The Chief Minister’s Office said that the scheme has been launched for: recovery of outstanding dues; for settlement of pre-GST arrears; and to enable reduction of compliance burden of legacy cases. The OTS will be applicable from 15 Nov 2023 to 15 Mar 2024 and taxpayers whose assessments have been framed till 31 Mar 2023. Those traders with an amount of total demand (tax, penalty and interest up to 31 Mar 2023) up to $10M, shall be eligible to apply for settlement under this scheme.