The Finance Minister, Mr. Manpreet Singh Badal, presented the Budget for Punjab for financial year 2020-21 on February 28, 2020.

Budget Highlights

  • The Gross State Domestic Product of Punjab for 2020-21 (at current prices) is projected to be Rs 6,44,326 crore.  This is 12% higher than the revised estimate for 2019-20. 
     
  • Total expenditure for 2020-21 is estimated to be Rs 1,54,805 crore, a 2.0% increase over the revised estimate of 2019-20.  In 2019-20, total expenditure is estimated to decrease by 4.3% (Rs 6,796 crore) from the budget estimates. 
     
  • Total receipts (excluding borrowings) for 2020-21 are estimated to be Rs 88,050 crore, a decrease of 2.2% as compared to the revised estimate of 2019-20.  In 2019-20, total receipts (excluding borrowings) are estimated to fall short of the budgeted estimate by Rs 4,156 crore (4.4% of the budgeted estimate). 
  • Revenue deficit for 2020-21 is targeted at Rs 7,712 crore, or 1.2% of the Gross State Domestic Product (GSDP).   Fiscal deficit is targeted at Rs 18,828 crore (2.9% of GSDP).  
     
  • In 2020-21, the sectors of Rural Development (179%), Water Supply, Sanitation, Housing and Urban Development (122%), and Irrigation and Flood Control (24%) saw the highest increase in allocations over the revised estimate of previous year.

Policy Highlights

  • Agriculture: Crop loans of up to Rs 2 lakh taken by small and marginal farmers, as well as landless labourers will be waived. An amount of Rs 2,000 crore has been allocated for this provision of crop loan waivers. Further, Rs 8,275 crore has been allocated for providing free power to the agriculture sector. 
     
  • Power subsidy for other sectors: An amount of Rs 2,267 crore has been allocated for providing subsidised power to industries.  Further, Rs 1,705 crore has been announced for providing subsidised power to domestic consumers, including Scheduled Caste, Backward Class, and below-poverty line consumers.
     
  • Labour welfare:  As per the budget speech, the government will provide monthly financial assistance of Rs 3,000 to all the construction workers in their old age and Rs 1,500 per month to their spouses.  The scheme aims to benefit 3.5 lakh construction worker families.   
     
  • Free education till class 12:  At present, the government provides free education to all students till class eight and to girls till class 12.  This has been extended to provide free education in government schools to all students till class 12.  

Punjab’s Economy

  • GSDP:  The growth rate of Punjab’s GSDP (at constant prices) has decreased from 6.4% in 2017-18 to 6.0% in 2018-19. 
     
  • Sectors:  In 2018-19, agriculture, manufacturing, and services contributed to 25%, 25% and 50% of the GSVA, respectively.  In the same year, these sectors grew by 2.3%, 5.8% and 7.1%, respectively.
     
  • Per capita income:  The per capita GSDP of Punjab in 2018-19 (at constant prices) was Rs 1,15,882.  This is 5.0% higher than 2017-18.
     
  • Unemployment:  According to the annual report of the Periodic Labour Force Survey (2017-18), Punjab has an unemployment rate of 7.8% which is higher than the all-India unemployment rate of 6.1%.

Figure 1: Growth in GSDP and sectors in Punjab at constant (2011-12) prices  

Note: GSVA (or gross state value added) by a sector denotes the contribution of that sector to state’s economy.  These numbers are as per constant prices, which implies that the growth rate is adjusted for inflation.

Sources:  Statistical Abstract 2020-21; Economic Survey of Punjab 2019-20, Punjab Budget Documents; PRS.

Budget Estimates for 2020-21

  • The total expenditure in 2020-21 is targeted at Rs 1,54,805 crore.  This is 2.0% higher than the revised estimates of 2019-20.  This expenditure is proposed to be met through receipts (other than borrowings) of Rs 88,050 crore and borrowings of Rs 64,998 crore.  Total receipts for 2020-21 (other than borrowings) are expected to be 2.7% higher than the revised estimate of 2019-20.  In 2019-20, the total expenditure is estimated to decrease by Rs 6,796 crore (4.3%) from the budget estimates, whereas, receipts (other than borrowings) are estimated to fall short by Rs 4,156 crore (4.4%) from the budget estimates.    

Table 1: Budget 2020-21 - Key figures (in Rs crore)

Items

2018-19 Actuals

2019-20 Budgeted

2019-20 Revised

% change from BE 2019-20 to RE 2019-20

2020-21 Budgeted

% change from RE 2019-20 to BE 2020-21

Total Expenditure

1,16,948

1,58,493

1,51,697

-4.3%

1,54,805

2.0%

A. Receipts (except borrowings)

63,118

94,195

90,039

-4.4%

88,050

-2.2%

B. Borrowings

52,098

59,975

58,947

-1.7%

64,998

10.3%

Total Receipts (A+B)

1,15,216

1,54,170

1,48,986

-3.4%

1,53,048

2.7%

Revenue Deficit

13,135

11,687

12,627

8.0%

7,712

-38.9%

As % of GSDP

2.52%

2.02%

2.20%

 

1.20%

 

Fiscal Deficit

16,059

19,658

17,025

-13.4%

18,828

10.6%

As % of GSDP

3.08%

3.40%

2.96%

 

2.92%

 

*Primary Deficit

-247

1,989

-600

-130.2%

-247

-58.8%

As % of GSDP

-0.05%

0.34%

-0.10%

 

-0.04%

 

Notes: *(-) sign indicates a primary surplus; BE is Budget Estimate; RE is Revised Estimate.  GSDP for 2020-21 is Rs 6,44,326 crore.  GSDP for 2019-20 BE and 2019-20 RE taken to be Rs 5,77,829 crore, and Rs 5,74,760 crore respectively.  

Sources: Punjab Budget Documents 2020-21; PRS.

Expenditure in 2020-21

  • Capital expenditure for 2020-21 is proposed to be Rs 59,089 crore, which is a decrease of 9.2% over the revised estimates of 2019-20.  Capital expenditure includes expenditure affecting the assets and liabilities of the state, such as: (i) capital outlay, i.e. expenditure which leads to creation of assets (such as bridges and hospitals), and (ii) repayment and grant of loans by the state government.  

Grants to Local Governments

The state government provides compensation and assignments to local bodies and Panchayati Raj institutions.     In 2020-21, this amount is estimated to be Rs 4,337 crore, a decrease of 33% over the revised estimates of 2019-20.     In 2019-20, grants-in-aid increased by Rs 1,287 core (25%) from the budget estimates.  

  • Punjab’s capital outlay for 2020-21 is estimated to be Rs 10,280 crore, which is 47.7% lower than the revised estimate of 2019-20.  In 2019-20, capital outlay of the state reduced by Rs 3,201 crore (14%) from the budget estimates.   The capital outlay towards energy is estimated to decrease by Rs 15,498 crore (99%) from the revised estimates of 2019-20.  This is primarily on account of the reduction in investment of Rs 15,628 crore in state electricity boards.
     
  • Revenue expenditure for 2020-21 is proposed to be Rs 95,716 crore, which is an increase of 10.5% over revised estimates of 2019-20.  In 2019-20, revenue expenditure reduced by Rs 3,595 crore from the budget estimates.  This expenditure includes payment of salaries, interest payments etc.  

Table 2: Expenditure budget 2020-21 (in Rs crore)

Items

2018-19 Actuals

2019-20 Budgeted

2019-20 Revised

% change from BE 2019-20 to RE 2019-20

2020-21 Budgeted

% change from RE 2019-20 to BE 2020-21

Capital Expenditure

41,544

68,296

65,095

-4.7%

59,089

-9.2%

of which Capital Outlay

2,412

22,842

19,641

-14.0%

10,280

-47.7%

Revenue Expenditure

75,404

90,197

86,602

-4.0%

95,716

10.5%

Total Expenditure

1,16,948

1,58,493

1,51,697

-4.3%

1,54,805

2.0%

A. Debt Repayment

37,771

44,640

44,633

0.0%

47,928

7.4%

B. Interest Payments

16,306

17,669

17,625

-0.2%

19,075

8.2%

Debt Servicing (A+B)

54,077

62,309

62,258

-0.1%

67,003

7.6%

Note: Capital outlay denotes expenditure which leads to creation of assets.

Sources: Punjab Budget Documents 2020-21; PRS.  

Sectoral expenditure in 2020-21

The sectors listed below account for 53% of the total budgeted expenditure of Punjab in 2020-21.  A comparison of Punjab’s expenditure on key sectors with that by other states can be found in the Annexure.

Table 3: Sector-wise expenditure for Punjab Budget 2020-21 (in Rs crore)

Sector

2018-19

Actuals

2019-20

Budgeted

2019-20

Revised

2020-21

Budgeted

% change from RE 2019-20 to BE 2020-21

Budget provisions for 2020-21

Agriculture and allied activities

12,423

14,500

11,788

13,267

13%

  • Rs 2,000 crore has been allocated for the provision of crop loan waivers.
     
  • Rs 8,275 crore allocated for providing free power to the agriculture sector.

Education, Sports, Arts, and Culture

10,281

12,888

11,710

13,037

11%

  • Rs 3,131 crore and Rs 6,174 crore has been allocated towards government primary schools and government secondary schools, respectively.

Police

5,672

6,452

6,151

6,754

10%

  • Rs 1,343 crore and Rs 4,198 crore has been allocated towards special police forces and district police, respectively.

Social Welfare and Nutrition

3,208

3,753

4,329

4,728

9%

  • Rs 1,087 crore has been allocated for pension under social security schemes.

Water Supply, Sanitation, Housing and Urban Development

1,712

3,394

2,070

4,593

122%

  • Rs 810 crore, Rs 700 crore, and Rs 249 crore have been allocated for Smart Cities, AMRUT, and PM Awas Yojana (Urban), respectively.

Health and Family Welfare

3,244

4,156

3,734

4,532

21%

  • Rs 221 crore has been allocated for the Ayushman Bharat scheme. 

Irrigation and Flood Control

1,422

2,266

2,021

2,510

24%

  • Rs 1,071 crore has been allocated to towards the construction and upgradation of various irrigation projects. 

Industry and Minerals

707

1,741

2,171

2,473

14%

  • Rs 2,267 crore has been allocated as power subsidy to industries.

Rural Development

637

1,782

818

2,283

179%

  • Rs 320 crore has been allocated to the Mahatma Gandhi National Rural Employment Guarantee Scheme.

Transport

1,256

1,662

1,180

1,945

65%

  • Rs 2,276 crore allocated for the construction of roads and bridges.

% of total expenditure

52%

47%

43%

53%

 

 

Source: Punjab Budget Documents 2020-21; PRS.

Committed expenditure:  Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest.  A larger proportion of budget allocated for committed expenditure items limits the state’s flexibility to decide on other expenditure priorities such as capital investments.  In 2020-21, Punjab is estimated to spend Rs 58,981 crore on committed expenditure, i.e. payment of salaries, pensions, and interest.  This is 10.7% higher than the revised estimate of 2019-20 (Rs 53,287 crore).   These committed liabilities are estimated to form 67% of the state’s revenue receipts. Salaries form the highest component (47%) of the committed expenditure.  This expenditure on salaries is estimated to increase by 8.6% in 2020-21 over the 2019-20 revised estimate.  

Table 4: Committed Expenditure for the state in 2020-21 (in Rs crore)

Item

2018-19 Actuals

2019-20 Budgeted

2019-20 Revised

% change from BE 2019-20 to RE 2019-20

2020-21 Budgeted

% change from RE 2019-20 to BE 2020-21

Salaries

24,324

26,979

25,449

-5.7%

27,639

8.6%

Pensions

10,089

10,875

10,213

-6.1%

12,267

20.1%

Interest Payments

16,306

17,669

17,625

-0.2%

19,075

8.2%

Committed Expenditure

50,719

55,523

53,287

-4.0%

58,981

10.7%

Sources:  Punjab Budget Documents 2020-21; PRS.
 

Receipts in 2020-21

  • The total revenue receipts for 2020-21 are estimated to be Rs 88,004 crore, an increase of 19% over the revised estimates of 2019-20.  Of this, Rs 43,870 (50% of the revenue receipts) crore will be raised by the state through its own resources, and Rs 44,134 crore (50% of the revenue receipts) will be in the form of central transfers, i.e. state’s share in central taxes and grants-in-aid from the central government.
     
  • Devolution:  In 2020-21, receipts from the state’s share in central taxes is estimated to increase by 35.5% over the 2019-20 revised estimate.  However, in 2019-20, devolution is estimated to decrease by 22.3% to Rs 10,346 crore as compared to the budgeted estimate.  This may be due to a 19% cut in the union budget for devolution to states, from Rs 8,09,133 crore at the budgeted stage to Rs 6,56,046 crore at the revised stage.   Annexure 2 outlines the major recommendations of the 15th Finance Commission for the year 2020-21, particularly the revised share of Punjab and the other states in central government’s tax revenue.

Table 5: Break up of state government receipts (Rs crore)

Items

2018-19 Actuals

2019-20 Budgeted

2019-20 Revised

% change from BE 2019-20 to RE 2019-20

2020-21 Budgeted

% change from RE 2019-20 to BE 2020-21

State's Own Tax

      31,574 

      37,674 

      33,739 

-10.4%

       35,824 

6.2%

State's Own Non-Tax

       7,582 

       9,477 

       7,962 

-16.0%

         8,046 

1.1%

Share in Central Taxes

      12,005 

      13,319 

      10,346 

-22.3%

       14,021 

35.5%

Grants-in-aid from Centre

      11,107 

      18,039 

      21,928 

21.6%

       30,113 

37.3%

Total Revenue Receipts

      62,269 

      78,510 

      73,975 

-5.8%

       88,004 

19.0%

Borrowings

      52,098 

      59,975 

      58,947 

-1.7%

       64,998 

10.3%

Other receipts

          849 

      15,685 

      16,064 

2.4%

             45 

-99.7%

Total Capital Receipts

      52,947 

      75,660 

      75,010 

-0.9%

       65,043 

-13.3%

Total Receipts

1,15,216

1,54,170

1,48,986

-3.4%

     1,53,048 

2.7%

Sources: Punjab Budget Documents 2020-21; PRS. 

  • Own tax revenue:  Total own tax revenue of Punjab is estimated to be Rs 35,824 crore in 2020-21.  The own tax to GSDP ratio is targeted at 5.6% in 2020-21, which is in the same range as the revised estimate of 5.8% in 2019-20.  This implies that growth in collection of taxes has been slightly lower than the growth in the economy.

Table 6: Some of state’s own-tax revenue (in Rs crore)

Items

2018-19 Actuals

2019-20

Budgeted

2019-20 Revised

% change from BE 19-20 to RE 19-20

2020-21 Budgeted

% change from RE 19-20 to BE 20-21

% of Revenue Receipts in 20-21

State GST

13,273

17,110

13,443

-21.4%

15,859

18.0%

18.0%

State Excise Duty

5,072

6,201

5,676

-8.5%

6,250

10.1%

7.1%

Sales Tax and VAT

6,572

6,353

5,402

-15.0%

5,575

3.2%

6.3%

Stamps Duty and Registration Fees

2,298

2,650

2,400

-9.4%

2,625

9.4%

3.0%

Taxes and Duties on Electricity

2,330

2,711

4,479

65.2%

2,915

-34.9%

3.3%

Taxes on Vehicle

1,861

2,460

2,115

-14.0%

2,370

12.1%

2.7%

Land Revenue

69

112

78

-30.4%

78

0.2%

0.1%

GST Compensation Grants

7,129

8,619

13,087

51.8%

12,975

-0.9%

14.7%

Sources: Punjab Budget Documents 2020-21; PRS.

  • State Goods and Services Tax (SGST) is the largest component of tax revenue of the state.  It comprises 18% of revenue receipts budgeted for the year 2020-21.  SGST is expected to generate Rs 15,859 crore in 2020-21, an increase of 18% over the revised estimates of 2019-20.  
     
  • In 2020-21, Punjab is expected to generate Rs 6,250 crore from state excise duty.  This is an increase of 10.1% from the revised estimates of 2019-20.  
      
  • Further, in 2020-21 the state is expected to generate Rs 5,575 crore through the levy of sales tax (on items such as petroleum products) and VAT and Rs 2,625 crore from stamp duty and registration fees.  

GST Compensation:  The GST (Compensation to States) Act, 2017 guarantees states compensation for five years (till 2022) for any revenue loss arising due to GST implementation.  The Act guarantees states a 14% annual growth on their revenue which was subsumed under GST.  If the GST revenue of a state does not match the guaranteed growth, compensation grants are provided to meet the shortfall.

Punjab has estimated GST compensation grants of Rs 12,975 crore for 2020-21, which is a decrease of 0.9% over the revised estimate of 2019-20.  In 2019-20, compensation grants are estimated to increase by 51.8% from Rs 8,619 crore at the budgeted stage to Rs 13,087 crore at the revised stage.  An increase in the compensation requirement of the state reflects a further decrease in the GST revenue growth rate, as compared to the 14% growth proposed under the Act.

Deficits, Debts and FRBM Targets for 2020-21

The Punjab Fiscal Responsibility and Budget Management Act, 2003 provides annual targets to progressively reduce the outstanding liabilities, revenue deficit and fiscal deficit of the state government.  

Debt Servicing:  In 2020-21, Punjab is expected to spend Rs 67,003 crore on servicing its debt.  This is 7.6% higher than the revised estimates of 2019-20.  This includes Rs 47,928 crore towards repaying loans, and Rs 19,075 crore towards interest payments.  

Revenue deficit:  It is the excess of revenue expenditure over revenue receipts.  A revenue deficit implies that the government needs to borrow in order to finance its expenses which do not create capital assets.  

The budget estimates a revenue deficit of Rs 7,712 crore (or 1.2% of GSDP) in 2020-21, which is a decrease of 38.9% from the revised estimates of 2019-20.  This implies that revenue receipts are expected to be lower than the revenue expenditure, resulting in a deficit.  The 14th Finance Commission had recommended that states should eliminate revenue deficits.  The 2020-21 estimates for Punjab suggest that the state will not be meeting this target of eliminating revenue deficit.  As per the 15th Finance Commission recommendations, in 2020-21, Punjab will receive revenue deficit grants of Rs 7,659 crore to eliminate its revenue deficit.

Fiscal deficit:  It is the excess of total expenditure over total receipts.  This gap is filled by borrowings by the government, and leads to an increase in total liabilities.  In 2020-21, fiscal deficit is estimated to be Rs 18,828 crore, which is 2.9% of the GSDP.   The estimate is lower than the 3% limit as per the FRBM Act.  This limit may be relaxed to a maximum of 3.5% of GSDP, if states are able to contain their debt and interest payments to certain specified levels.

Outstanding Liabilities:  Outstanding liabilities is the accumulation of borrowings over the years.  In 2020-21, the outstanding liabilities are expected to be 38.5% of the GSDP.  

Table 7: Budget targets for deficits for Punjab in 2020-21 (% of GSDP)

Year

Revenue 

Fiscal 

Outstanding Liabilities

Deficit (-)/Surplus (+) 

Deficit (-)/Surplus (+)  

2018-19 (actuals)

-2.5%

-3.1%

40.6%

2019-20 (RE)

-2.2%

-3.0%

39.8%

2020-21 

-1.2%

-2.9%

38.5%

2021-22

-2.7%

-4.1%

39.0%

2022-23

-3.9%

-5.3%

38.5%

Note: RE indicates revised estimate. 

Sources: Punjab Budget Documents 2020-21; PRS.

Figures 2 and 3 show the trend in deficits and outstanding liabilities targets from 2018-19 to 2022-23.

Figure 2: Revenue and Fiscal Deficit/Surplus (as % of GSDP) 

 Note:  Numbers for 2018-19, 2019-20 and 2020-21 are actuals, revised estimates, and budget estimates respectively. 

Sources: Punjab Budget Documents; PRS.  

Figure 3: Outstanding liabilities targets (as % of GSDP)

Note:  Numbers for 2018-19, 2019-20 and 2020-21 are actuals, revised estimates, and budget estimates respectively.

Sources: Punjab Budget Documents; PRS.  

Annexure

The graphs below compare Punjab’s expenditure on six key sectors as a proportion of its total budget, with the average of 29 states. [1]  

  • Education:  Punjab has allocated 12.3% of its expenditure on education in 2020-21.  This is marginally lower than the average budget allocation for education by 29 states (using 2019-20 BE).  
  • Health:  Punjab has allocated 4.3% of its total expenditure on health, which is lower than the average expenditure of 29 states. 
     
  • Agriculture and allied activities:  The state has allocated 12.5% of its total budget towards agriculture and allied activities.  This is higher than the allocations of 29 states (7.1%).
     
  • Rural development:  Punjab has allocated 2.2% of its expenditure on rural development.  This is significantly lower than the average (6.2%) of the 29 states.
     
  • Police:  Punjab has allocated 6.4% of its total expenditure on police, which is higher than the average expenditure of 29 states (4.1%).
     
  • Roads and bridges:  Punjab has allocated 1.5% of its total expenditure on roads and bridges, which is significantly lower than the average expenditure of 29 states (4.2%). 

 

Note: 2018-19, 2019-20 (BE), 2019-20 (RE), and 2020-21 (BE) figures are for Punjab.

Source: Annual Financial Statement (2019-20 and 2020-21), various state budgets; PRS.

Annexure 2:  15th Finance Commission’s recommendations for 2020-21

The 15th Finance Commission’s (15th FC) report for the financial year 2020-21 was tabled in Parliament on February 1, 2020.  The 15th FC recommended a 41% share for states in the central government’s tax revenue in 2020-21, a 1% decrease from the 42% share recommended by the 14th FC (2015-20).  The 1% decrease is to provide funds to the newly formed union territories of Jammu and Kashmir, and Ladakh from the share of the central government.   The 15th FC also proposed revised criteria for determining the share of individual states.

Table 8 shows the share of states in the central government's tax revenue [2], as per the recommendations of the 14th FC for 2015-20 and the 15th FC for 2020-21.  The 15th FC has recommended a 0.73% share for Punjab in the centre’s tax revenue for 2020-21 (an increase of 11% from the share recommended by the 14th FC for 2015-20).  This implies that out of every Rs 100 of centre’s tax revenue in 2020-21, Punjab will receive Rs 0.73.  Table 8 also shows the estimated devolution to states by the centre for 2019-20 and 2020-21 (in Rs crore).

Table 8:  Share of states in centre’s tax revenue under the 14th and 15th Finance Commissions (2020-21)

State

Share of states in centre’s tax revenue

Devolution to states by the centre

14th FC (2015-20)

15th FC (2020-21)

% change

2019-20 RE

2020-21 BE

% change

Andhra Pradesh

1.81

1.69

-7%

28,242

32,238

14%

Arunachal Pradesh

0.58

0.72

24%

8,988

13,802

54%

Assam

1.39

1.28

-8%

21,721

24,553

13%

Bihar

4.06

4.13

2%

63,406

78,896

24%

Chhattisgarh

1.29

1.4

9%

20,206

26,803

33%

Goa

0.16

0.16

0%

2,480

3,027

22%

Gujarat

1.3

1.39

7%

20,232

26,646

32%

Haryana

0.46

0.44

-4%

7,112

8,485

19%

Himachal Pradesh

0.3

0.33

10%

4,678

6,266

34%

Jammu and Kashmir

0.78

-

-

12,171

-

-

Jharkhand

1.32

1.36

3%

20,593

25,980

26%

Karnataka

1.98

1.49

-25%

30,919

28,591

-8%

Kerala

1.05

0.8

-24%

16,401

15,237

-7%

Madhya Pradesh

3.17

3.23

2%

49,518

61,841

25%

Maharashtra

2.32

2.52

9%

36,220

48,109

33%

Manipur

0.26

0.29

12%

4,048

5,630

39%

Meghalaya

0.27

0.31

15%

4,212

5,999

42%

Mizoram

0.19

0.21

11%

3,018

3,968

31%

Nagaland

0.21

0.23

10%

3,267

4,493

38%

Odisha

1.95

1.9

-3%

30,453

36,300

19%

Punjab

0.66

0.73

11%

10,346

14,021

36%

Rajasthan

2.31

2.45

6%

36,049

46,886

30%

Sikkim

0.15

0.16

7%

2,408

3,043

26%

Tamil Nadu

1.69

1.72

2%

26,392

32,849

24%

Telangana

1.02

0.87

-15%

15,988

16,727

5%

Tripura

0.27

0.29

7%

4,212

5,560

32%

Uttar Pradesh

7.54

7.35

-3%

1,17,818

1,40,611

19%

Uttarakhand

0.44

0.45

2%

6,902

8,657

25%

West Bengal

3.08

3.08

0%

48,048

58,963

23%

Total 

42

41

-2%

6,56,046

7,84,181

20%

Sources:  Reports of 14th and 15th Finance Commissions (2020-21); Union Budget Documents 2020-21; PRS.

In addition, the 15th FC has also recommended certain grants-in-aid for various purposes for the year 2020-21.  These include: (i) Rs 74,341 crore as grants to states for eliminating revenue deficit, of which Punjab will receive Rs 7,659 crore, (ii) Rs 90,000 crore as grants to local bodies, of which Punjab will receive Rs 2,056 crore (Rs 1,388 crore to rural local bodies and Rs 668 crore to urban local bodies).

 

[1] The 29 states include all states except Manipur.  It includes the Union Territory of Delhi and erstwhile state of Jammu and Kashmir.

[2] This excludes the cess and surcharge revenue of the central government as it is outside the divisible pool and not shared with states.  As per the 2019-20 Union Budget, cess and surcharge revenue account for 15% of the estimated gross tax revenue of the central government.

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