Guest Column| Given constraints, Punjab budget couldn’t have been better

Given Punjab’s financial bind, the budget presented by finance minister Harpal Cheema on Wednesday could not have been more balanced, realistic, or transparent. While the state’s debt-to-GSDP ratio remains alarmingly high, second only to one other state, it must be viewed in the correct context. This is a legacy burden. Those who left the cupboard bare now occupy the opposition benches or have been relegated to the footnotes of Punjab’s political landscape. Their present indignation stands in stark contrast to their past inaction.

The budget team has had to navigate a minefield of unpaid liabilities — dues to the power sector, pending scholarships, subsidies yet to be honoured, and treasury bills carried over from earlier fiscal years. In such an environment, allocating resources to fresh development initiatives becomes not just difficult but almost untenable.

Nonetheless, the budget makes an earnest attempt to clear pending commitments, particularly those relating to socially sensitive sectors such as Scheduled Caste student scholarships and rural infrastructure works. While the criticism over limited capital expenditure is not unfounded, the government’s decision to first stabilise the fiscal foundation before embarking on new ventures is sound.

Walking the tightrope

In a state where over two-thirds of revenue expenditure is pre-committed to salaries, pensions, interest payments, and subsidies, the room for manoeuvre is narrow. Yet the budget manages to touch upon nearly every vital sector — from agriculture and education to rural roads, health and industrial promotion — without surrendering to populism.

The continued support to the power sector, while financially burdensome, is a recognition of the political and social volatility around electricity pricing in Punjab. Agriculture diversification finds mention and funding, though the quantum may need to be bolstered if the state is to seriously shift from the water-guzzling paddy cycle. Social sector schemes, particularly scholarships and targeted subsidies, have been prioritised over blanket giveaways, a sensible and overdue move.

Enhancing revenue

Punjab’s economic recovery will not be driven by austerity alone. Revenue augmentation through improved compliance, expansion of the tax base, and recovery of pending central grants remains crucial. The budget outlines ongoing efforts to reclaim long-pending dues from the Centre, including those under rural development and health missions. The state’s demand for a higher share in central taxes is not without merit. Punjab’s contribution to national food security and border integrity is disproportionate to its population or political clout. This fiscal imbalance must be corrected through the finance commission’s formulae and not via sporadic grants.

Centre’s crucial responsibility

It is no longer viable to place the entire burden of fiscal recovery on the state alone. The Centre must rise above political calculations and deliver what is rightfully due to Punjab whether it be the pending rural development fund (RDF) or National Health Mission (NHM) funds, infrastructure allocations, or policy attention. The fact that Punjab’s long-standing demands for improved border infrastructure, additional Vande Bharat trains, and enhanced urban mobility support continue to be ignored is disappointing.

The forthcoming 16th Finance Commission must address Punjab’s request for a special package not as a favour but as a fiscal correction tool. Issues like narco-terrorism, groundwater depletion, and agrarian reform need structured funding support from the Union government.

The opposition’s role should not be limited to soundbites and walkouts. Constructive opposition would mean supporting calls for GST compensation, working jointly to advocate Punjab’s demands before the Centre, and proposing bipartisan fiscal responsibility legislation.

Cross-sectoral approach

It is now imperative to move beyond government silos and adopt a cross-sectoral, inter-departmental approach to address Punjab’s jobless growth and declining entrepreneurial momentum. Educational institutions, NGOs, industry associations, and even venture capitalists must be integrated into a new economic ecosystem.

Punjab’s youth, known for their enterprise and work ethic, need local platforms to build careers, not just international aspirations. Given the latest visa clampdown announced by Canada and the United States’ hardened immigration stance, it is no longer prudent to view foreign migration as a safety valve. We must build here what our youth are seeking elsewhere — startups, skilled jobs, and opportunities that reward innovation.

Sectoral priorities

Agriculture remains central, but the future lies in diversification and value addition. This will require not just MSP guarantees but crop insurance, food processing infrastructure, and reliable irrigation. Education must go beyond enrollment and into employability. The budget’s expansion of the EWS quota in private schools is a step forward, but partnerships with the private sector for vocational skilling must follow. Healthcare infrastructure needs urgent investment at the secondary and tertiary levels. The present focus on mohalla clinics must be complemented with strengthened district hospitals and public health research. Urban governance, too, must be empowered with real funds and real authority.

Cautiously optimistic

This budget is not a miracle, but in today’s circumstances, it is a foundation worth building upon. Its strength lies in its honesty. There are no extravagant promises, no fiscal gimmicks, and no populist detours. There is realism, and that is rare.

What happens next will depend on how this blueprint is executed. For that, Punjab will need not only financial discipline and administrative clarity, but also the political maturity to treat fiscal revival as a shared mission.

We must remain cautiously optimistic, not because all is well but because the hard choices are finally being acknowledged. And in governance, acknowledgement is the first step towards action. kbs.sidhu@gmail.com

The writer is a retired 1984-batch IAS officer and former special chief secretary of Punjab. Views expressed are personal.