Reply to the Budget By Jassi Khangura - 18/03/2010

Mr Speaker, Thank you for granting me time.

The FM had delivered a good speech, but lacked the sparkle of earlier years. Maybe the pressure is telling.

Budget is a critical revelation of the government’s finances and financial intentions. It is the pulse of the government. Tells whether the state is making progress. Today Punjab is on the hospital bed and the pulse is getting weaker.

FM’s 4th budget. Sadly he himself says that he has nothing new. Only has “old prescription”.

This is not the budget. That was the Sukhbir-Kalia report which had far bigger fiscal implications than this budget. Rs.2000Cr / Rs.4000Cr.

It is an insult to the members of this house that government feels it can pass major financial issues without referring it to the house.

The VAT and VAT surcharge increases omitted from this statement. Not even asking for retrospective consent.

FM frequently complains of the paucity of resources. State revenues are directly linked with the state’s economic activity but where are the policies to deliver?

Economic growth requires:

1.    Confidence. Punjab fails miserably. Not a favoured investment destination.

2.    Pro-business attitude. Large business houses are staying away. “Respect” lacking. Fear that doing business in Punjab might be “expensive”. “Fast tracking in name only” Corruption major problem. I am privy to demands placed on investors by the political leadership. Quantum and Equity. Outside of Punjab every CM queues up to meet potential investors but the Punjab leadership still thinks that CEO and industrialists should queue up for them.

3.    Proactive Leadership. When many states are competing for the same investment we have to be competitive. Why is Sukhbir not present at the World Economic Forum at Davos? How many Fortune 500 CEOs have visited Punjab?

4.    Policy Stability. Biggest mistake was withdrawing the CLU consents for 32 mega projects out of which 27 were reinstated without explanation. All were called prior to the elections. This was a fundamental breach of trust.

5.    Good law and order. Shingaar cinema blast, frequent RDX seizures, riots and bandhs all conribute to an negative image for Punjab in India and outside India.

6.    Innovation. Where are the incentives? Where are the awards? Both public and pvt sectors can innovate.

7.    Decisive bureaucracy. Takes the lead from the political masters and corruption and efficiency. Sadly, this government has brow beaten the officers. The vigilance department is used as a weapon of intimidation. Arrest of V K Janjua is a case in point. Bureaucracy is scared to take a decision. IAS and IPS officers are openly and frequently intimidated with the threat of the Vigilence Bureau.

8.    NRI support. 3 million Punjabi’s live outside of India excluding the Gulf. Where are the NRI projects? Why failed to attract? How many NRI investor meets has Sukhbir and Mr Badal attended. Example of Amritsar International hotel that was privatised by the previous government and where the promoter refuses to work with this government. I can pass his details to the FM for what will be an illuminating conversation..

Power.

PSEB capex is included in the annual plan. This is non-plan expenditure and this practice must stop.

Good to start new projects. Without improving PSEB efficiency there is a linear correlation between PSEB losses and the availability of power. Today the subsidy is nearer Rs.3000Cr. Tomorrow it may touch Rs.6000Cr. Punjab may not be able to buy all the power. Sukhbir has said that we will be selling power to other states. What he has not said is that power cuts will continue in Punjab whilst Punjab sells power elsewhere.

SUGGESTION: Improving PSEB efficiency is a difficult task. It requires political will which this government lacks. Massive investments in PSEB infrastructure are being made to evacuate power. So how can we maximize the benefit to Punjab from the new private sector thermal projects. ANSWER: Set up industrial parks in the immediate vicinity of these new units and allow them to sell power directly to new industry or industry that is prepared to relocate there.

PIDB.

Increases in the levy from 1% to 3%, all by executive order not by budget or house consent, have increased its resources.

Under pressure from the DCM it has concentrated on pushing grandiose schemes. PIDB has good officers. But it has bad political guidance.

PIDB should be looking for infrastructure projects in each one of the 117 assembly constituencies. I have 82 villages – not a single PIDB assisted or promoted project. PIDB is urban centric. It discriminates against rural Punjab. It does not provide gap funding that would make numerous small rural infrastructure projects viable.

PIDB is the custodian of state assets awaiting liquidation. It should be re-titled the Punjab Public Assets Liquidation Board.

Urban planning

HUDA v. PUDA

The government has sacrificed much gain to the private sector that were due to the government.

Government can be a responsible and profitable colonizer.

PUDA could be a facilitator for NRI urban property purchases. PUDA should have promoted NRI housing where the state guarantees security of property. Charge a 5% fee from the NRI but guarantee him security of tenure.

This FM has one more Budget to go. How will his 5 budgets be remembered:

Ambitious? Aggressive targets. 4% growth in the current Annual Plan is not enough.

Reformist ? Where are the fiscal reforms. There have been no major changes in how we collect and spend money. Technology? I has been pressing for 3 years the real time recording of sales and purchases for all traders and maufacturers to prevent retrospective reconstruction of books of account.

(cut short by the Speaker at this juncture)

Jassi Khangura
Chandigarh

18.03.10