Panjab’s Fiscal Health Deteriorates in ’22-23, Law Passed Against Illegal Colonies

On 5 Sep, the Comptroller and Auditor General report revealed significant issues regarding Panjab’s fiscal health, failure to meet deadlines for central assistance, and non-compliance with Goods and Services Tax (GST) by state institutions. The report disclosed Panjab’s revenue deficit rose sharply to $3.14B in 2022-23, up by $912M from the previous year, primarily due to mismatched receipts, reckless spending, and off-budget borrowings. The report also highlighted Panjab’s increasing fiscal deficit, recorded at $4.09B, or 5.04% of its Gross State Domestic Product, largely financed through market borrowing, with only 7% of the total borrowings used for capital expenditure. GST non-compliance by Punjabi University, Patiala, and Sardar Beant Singh State University, Gurdaspur led to a default of $637K in GST payments between July 2017 and March 2022. The state’s inability to meet deadlines led to Panjab losing out on central assistance for the Bus Rapid Transit System project in Amritsar. The Social Security, Women and Child Development Department has recovered $17.53M that was previously disbursed to 244K ineligible and deceased beneficiaries under the state pension scheme. On 6 Sep, Panjab scrapped the ₹3/unit power subsidy and increased value-added tax on fuel. The move impacts approximately 1.1M consumers, who will now pay around ₹3K ($36) more if they consume 1,000 units of electricity in a billing cycle. 90% households in Panjab had benefited from the govt.’s free electricity scheme, initiated shortly after CM Mann assumed office in 2022. The Panjab Assembly also passed the Punjab Apartment and Property Regulation (Amendment) Act, 2024, to curb illegal colonies and aid small plot holders.