Thursday, May 26, 2022



Centre to discontinue GST compensation grant from June 2022, will increase Punjab’s fiscal deficit by Rs.18,000-cr: Sidhu

Sanaur, Patiala, December 30, 2021 (Yes Punjab News)
Punjab Congress Chief Navjot Singh Sidhu today warned Punjabis that the Centre is contemplating discontinuing GST compensation grants to the states which will cause an increase in a fiscal deficit of Rs.18,000 crore.

Asking the state to wake up to the reality of the state’s fiscal condition and the hypocrisy of the central government, Sidhu revealed the dark side of state economics.

He revealed that the Income generated from tax collection and grants of central government schemes amount to Rs. 75,000 crore odd. However, Salaries and Pensions, Interest expenditure on previous loans, and repayment of principal loan amount itself come to Rs.100,000 crore which is a fixed expense of the state. This has caused the state to be in continuous debt.

Sidhu said, “Over and above this, the Central Government is soon to discontinue the GST compensation grant in June 2022 which is set to cause a dramatic increase in the fiscal deficit of the state amounting to Rs.18,000 crore annually. With additional losses of Rs. 9000 crore on VAT and Rs. 5000 Crore on power subsidy, the state is made to fall at the mercy of the center.”

He demanded that the state must continue to get the GST compensation grant even after June 2022 for another 5 years, which is a matter of right for the People due to the faulty implementation of GST by the Central Government.

This has caused us to review state governance with a microscope. It is imperative at this stage to note that the state of Punjab does not have a functional Gram Panchayat system. Elected Sarpanches, Panchs, Councils, and Corporators have independence and authority to effectively use People’s power vested in them.

Further, Sarpanchs have no authority to exercise in fulfilling 170 constitutional duties due to the continuous engagement of the panchayat secretary. Neither can they perform 12 activities for the collection of taxes and empowering local self-government nor allocation of government funds as a sign of panchayat secretaries are needed at each step. For each action authority from the Panchayat secretary is required to be taken causing the process to be power-centric as opposed to being people-centric.

Sidhu demanded that auditing must be done on such a sanction system at Panchayat level and a democratic mechanism be adopted and power be decentralized across all 12,500 villages of Punjab.

The PPCC president said it is with the Punjab Model that he plans to bring people’s power back to its people where it truly belongs and work towards reducing state debt and making it a flourishing state again.

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