Punjab Finance Minister Manpreet Singh Badal on Monday presented tax-free budget proposals for the year 2019-20 with a total outlay of ₹1,58,493 crore. With parliamentary elections round the corner, the Congress government also announced a cut in fuel prices.

The State government has decided to reduce petrol price by ₹5 per litre and diesel by ₹1 per litre, effective from Monday midnight.

VAT rationalisation

“Encouraged by the buoyancy of our revenue receipts and better cash flow management practices adopted by our government, we will take measures to rationalise the rates of VAT on petroleum products in line with the neighbouring States,” said Mr. Badal in his budget speech.

He later told reporters that Punjab will take up with the Centre the issue of aligning VAT rates of petrol in Chandigarh with that of Punjab.

“It is expected that parity in rates of VAT on petroleum products in the Punjab and the neighbouring States will result in relief to the end consumers in the form of reduced prices of petroleum products in the State,” he said.

Mr. Badal said that the outstanding debt of the State in 2019-20 is likely to be ₹2,29,612 crore as against the total outstanding debt of ₹2,12,276 crore for 2018-19 (revised estimate).

“When I presented the first budget of this government in 2017-18, there was an unfunded gap of ₹10,273 crore which was brought down to ₹4,175 crore in 2018-19. While we see a small carry-forward of our liabilities to the next year, for 2019-20, there is now much reduced unfunded gap of ₹2,323 crore,” said Mr. Badal.

He said that towards the welfare and development of agriculture and allied activities, the budget allocation for the agriculture and allied sectors has been set at ₹13,643 crore for 2019-20. “Excluding the effect of debt relief, the allocation to this sector has been increased by ₹159 crore. Similarly, the allocations for education and health sectors have been raised by 9.75% and 10.87%, respectively,” he said.

He said the allocation to develop rural and urban infrastructure has been hiked by 36.08% and 19.94% respectively, whereas 21.32% hike in allocation has been made for improving accessibility and connectivity.

Loan waiver

Mr. Badal said that under the government’s flagship “Farm Loan Waiver Scheme” the government, in the next phase of implementation of this scheme, will waive off the loans of landless farm labourers and the families of farmers who have been forced to end their lives, for which a total allocation of ₹3,000 crore during 2019-20 has been proposed.

The Opposition Shiromani Akali Dal termed the budget as a farce. Former Finance Minister Parminder Singh Dhindsa said the Congress government had played a cruel joke with the people by misstating facts and refusing to keep aside funds for fulfilling commitments to the people — be it farmers, youth or government employees. “The budget also discriminates against the underprivileged by not allocating appropriate funds for social welfare schemes,” he said.