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Punjab crisis: Subsidy Raj

As Punjab Finance Minister, Manpreet Badal was very vocal about doing away with the populist subsidy schemes in the revenue-deficit state — a stand that has now cost him his job. At the heart of his argument is the state’s debt bill which is estimated to add up to a whopping Rs 65,000 crore by March 2011.

Union Finance Minister Pranab Mukherjee reportedly assured that the Centre would agree to waive off half of this debt if the Punjab government agreed to cut

down subsidies on power and water, levy property tax, disinvest PSUs that are in the red, plug losses suffered by the transport department and put local bodies under central auditing.

Manpreet saw this as a “golden opportunity” for the state, but his cousin and Deputy Chief Minister Sukhbir Singh Badal said the proposal was “stringent and impractical”. While the battle between the cousins may be a game of political upmanship, there is no hiding the fact that Punjab fiscal health warrants some strong medicine.

Rest rest of the article at http://www.indianexpress.com/news/Subsidy-Raj/697449

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