Given Punjab’s monetary bind, the funds introduced by finance minister Harpal Cheema on Wednesday couldn’t have been extra balanced, sensible, or clear. Whereas the state’s debt-to-GSDP ratio stays alarmingly excessive, second solely to 1 different state, it should be seen within the appropriate context. It is a legacy burden. Those that left the cabinet naked now occupy the opposition benches or have been relegated to the footnotes of Punjab’s political panorama. Their current indignation stands in stark distinction to their previous inaction.
Punjab finance minister Harpal Singh Cheema (left) with chief minister Bhagwant Singh Mann earlier than presenting the state funds for 2025-26 on the meeting in Chandigarh on Wednesday. (Ravi Kumar/HT)
The funds workforce has needed to navigate a minefield of unpaid liabilities — dues to the facility sector, pending scholarships, subsidies but to be honoured, and treasury payments carried over from earlier fiscal years. In such an setting, allocating assets to contemporary improvement initiatives turns into not simply tough however virtually untenable.
Nonetheless, the funds makes an earnest try to clear pending commitments, notably these referring to socially delicate sectors equivalent to Scheduled Caste scholar scholarships and rural infrastructure works. Whereas the criticism over restricted capital expenditure will not be unfounded, the federal government’s determination to first stabilise the fiscal basis earlier than embarking on new ventures is sound.
Strolling the tightrope
In a state the place over two-thirds of income expenditure is pre-committed to salaries, pensions, curiosity funds, and subsidies, the room for manoeuvre is slender. But the funds manages to the touch upon almost each important sector — from agriculture and training to rural roads, well being and industrial promotion — with out surrendering to populism.
The continued help to the facility sector, whereas financially burdensome, is a recognition of the political and social volatility round electrical energy pricing in Punjab. Agriculture diversification finds point out and funding, although the quantum could must be bolstered if the state is to noticeably shift from the water-guzzling paddy cycle. Social sector schemes, notably scholarships and focused subsidies, have been prioritised over blanket giveaways, a wise and overdue transfer.
Enhancing income
Punjab’s financial restoration is not going to be pushed by austerity alone. Income augmentation by way of improved compliance, enlargement of the tax base, and restoration of pending central grants stays essential. The funds outlines ongoing efforts to reclaim long-pending dues from the Centre, together with these underneath rural improvement and well being missions. The state’s demand for a better share in central taxes will not be with out benefit. Punjab’s contribution to nationwide meals safety and border integrity is disproportionate to its inhabitants or political clout. This fiscal imbalance should be corrected by way of the finance fee’s formulae and never by way of sporadic grants.
Centre’s essential duty
It’s now not viable to put the whole burden of fiscal restoration on the state alone. The Centre should rise above political calculations and ship what’s rightfully because of Punjab whether or not or not it’s the pending rural improvement fund (RDF) or Nationwide Well being Mission (NHM) funds, infrastructure allocations, or coverage consideration. The truth that Punjab’s long-standing calls for for improved border infrastructure, further Vande Bharat trains, and enhanced city mobility help proceed to be ignored is disappointing.
The forthcoming sixteenth Finance Fee should deal with Punjab’s request for a particular package deal not as a favour however as a fiscal correction device. Points like narco-terrorism, groundwater depletion, and agrarian reform want structured funding help from the Union authorities.
The opposition’s position shouldn’t be restricted to soundbites and walkouts. Constructive opposition would imply supporting requires GST compensation, working collectively to advocate Punjab’s calls for earlier than the Centre, and proposing bipartisan fiscal duty laws.
Cross-sectoral method
It’s now crucial to maneuver past authorities silos and undertake a cross-sectoral, inter-departmental method to handle Punjab’s jobless progress and declining entrepreneurial momentum. Instructional establishments, NGOs, business associations, and even enterprise capitalists should be built-in into a brand new financial ecosystem.
Punjab’s youth, identified for his or her enterprise and work ethic, want native platforms to construct careers, not simply worldwide aspirations. Given the newest visa clampdown introduced by Canada and the US’ hardened immigration stance, it’s now not prudent to view international migration as a security valve. We should construct right here what our youth are looking for elsewhere — startups, expert jobs, and alternatives that reward innovation.
Sectoral priorities
Agriculture stays central, however the future lies in diversification and worth addition. This can require not simply MSP ensures however crop insurance coverage, meals processing infrastructure, and dependable irrigation. Training should transcend enrollment and into employability. The funds’s enlargement of the EWS quota in non-public faculties is a step ahead, however partnerships with the non-public sector for vocational skilling should comply with. Healthcare infrastructure wants pressing funding on the secondary and tertiary ranges. The current concentrate on mohalla clinics should be complemented with strengthened district hospitals and public well being analysis. City governance, too, should be empowered with actual funds and actual authority.
Cautiously optimistic
This funds will not be a miracle, however in at the moment’s circumstances, it’s a basis price constructing upon. Its power lies in its honesty. There aren’t any extravagant guarantees, no fiscal gimmicks, and no populist detours. There’s realism, and that’s uncommon.
What occurs subsequent will depend upon how this blueprint is executed. For that, Punjab will needn’t solely monetary self-discipline and administrative readability, but additionally the political maturity to deal with fiscal revival as a shared mission.
Karan Bir Singh Sidhu. (X)
The author is a retired 1984-batch IAS officer and former particular chief secretary of Punjab. Views expressed are private.