After 15 years shunning populism, the government of Punjab came up with new revenue proposals — a development tax on income tax payers and tax for social security as the state continues to stare at burgeoning deficits.
This Punjab Development Tax, along with a tax for funding social security schemes, was announced by Finance Minister Manpreet Singh Badal as he presented his Budget proposals for 2018-19. In the beginning of April, income tax assesses that professionals, traders and employees may have to pay Rs 200 per month. .
Manpreet Badal read out the proposals, totalling Rs 1,02,198 crore, amid a walkout by Opposition MLAs of the Aam Aadmi Party and SAD-BJP, on the matter of “insufficient funds” for the crop loan waiver scheme. With Punjab earning Rs 73,812 crore as revenue and spending Rs 86,351 crore, the revenue deficit has been pegged at Rs 12,539 crore. Also, Punjab’s debt is set to swell to Rs 2,11,523 crore by March 2019.
Till now, there were announcements on ARM in Budget speeches, without explaining how the government planned to achieve it. All was consistently left to “better tax compliance and tightening the tax net”. The fresh taxes have been proposed for additional resource mobilisation (ARM) to meet the resource gap (between income and expenditure).
Manpreet Badal admitted that despite the new taxes, there would be a resource gap of Rs 4,175 crore. He said while the government would be raking in Rs 150 crore through development tax (this is more like a professional tax, necessitated to get access to cheaper loans from external agencies like Asian Development Bank), the remaining ARM of Rs 1,350 crore would be realised after the approval of the social security legislation by the House.
A new tax was proposed to finance social security pensions amounting to Rs l,235 crore. “We will be increasing non-tax revenue, by raising the fee levied on government forms/services and by routing all funds through the state consolidated fund — from Rs 5,096.18 crore this year to Rs 10,248.85 crore in 2018-19,” Manpreet Badal said. The Finance Bill is likely to be taken up for passage.
Source: The Tribune