Technical Assistance Consultant’s Report

Project Number: 45288-002 September 2019

India: Supporting the Punjab Development Finance Program (Financed by ADB’s Technical Assistance Special Fund)

Prepared by PricewaterhouseCoopers

Kolkata, India

For: Finance Department, Government of Punjab

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

www.pwc.com/in

Supporting the Punjab Development Finance Program

ADB TA 8759-IND

Final Report (Volume I)

November 2018

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Table of Contents

1 Background and Program Objectives ...... 6

1.1 Background ...... 6 1.2 Program Objectives ...... 6 1.3 Deliverables ...... 7 1.4 Structure of the Report ...... 8

2 Compliance status achieved against second tranche policy actions ...... 9

2.1 Rationalized Expenditures focusing on Power Subsidies ...... 9 2.2 Improved Revenue Efforts ...... 14

3 Compliance status achieved against third tranche policy actions ...... 17

3.1 Improved Capacity for Fiscal Management ...... 17 3.2 Improved Revenue Efforts ...... 22

4 Additional inputs of the TA ...... 23

4.1 Non-Tax Revenue Analysis ...... 23 4.2 Debt Analysis ...... 49 4.3 Own Tax Revenue Analysis ...... 55 4.4 Estimation of profession tax collection ...... 59

5 Annexure A: MTFF - policy action no. 17 ...... 60

5.1 Projection Methodology ...... 60 5.2 Revenue projections ...... 61 5.3 Expenditure projections ...... 62 5.4 Medium term fiscal projections ...... 64

6 Annexure B: MTEF - policy action no. 18 ...... 67

6.1 Approach and delivery of the Training program ...... 67

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List of tables

Table 1: Component-wise Non-tax Revenue (NTR) (Rs. crores) ...... 24 Table 2: Detailed Analysis of Major Components of Each Service (Rs. crores) ...... 24 Table 3: State-wise Comparison of Revenues in crores (2013-14 RE) ...... 26 Table 4: State-wise Comparison of Own Non-tax Revenue (2013-14) ...... 26 Table 5: State-wise comparison of general services revenue ...... 27 Table 6: State-wise comparison of social services revenue ...... 28 Table 7: State-wise percentage share of major components of social services in total social services ...... 28 Table 8: State-wise comparison of economic services ...... 29 Table 9: State-wise percentage share of major components of economic services in total economic services ..... 30 Table 10: Elementary education sector ...... 31 Table 11: Elementary Education Revenue Receipts (in Rs. Lakh) ...... 32 Table 12: Component of Elementary Education Expenditure (in Rs. Lakh) ...... 33 Table 13: Elementary Education Recovery Rate (in Rupees) ...... 34 Table 14: Secondary education sector ...... 35 Table 15: Secondary Education Fee Structure in Punjab (in Rupees) ...... 37 Table 16: Secondary Education Revenue Receipts (in Rs. Lakh) ...... 37 Table 17: Components of Secondary Education Revenue Receipts (in Rs. Lakh) ...... 38 Table 18: Component of Secondary Education Revenue Expenditure (in Rs. Lakh) ...... 38 Table 19: Secondary Education Recovery Rate (in Rupees) ...... 40 Table 20: Higher education sector ...... 40 Table 21: Fees Structure of Government College, Punjabi University (in Rs.) ...... 43 Table 22: Fee Structure of Govt. College Mohali, Punjabi University (Semester) ...... 44 Table 23: Fees structure of government aided college affiliated to Punjab University (in Rs.) ...... 44 Table 24: Component of University and Higher Education Revenue Expenditure (in Rs. Lakh) ...... 45 Table 25: University and Higher Education Recovery Rate (in Rupees) ...... 46 Table 26: Technical education sector ...... 46 Table 27: Tuition fees of Industrial Training Institutes (ITI) ...... 47 Table 28: Total Number of Polytechnic Institutes and Total Seat Filled ...... 48 Table 29: Components of Technical Education Expenditure (in Rs. Lakh) ...... 48 Table 30: Technical Education Recovery Rate (in Rupees) ...... 48 Table 31: High Cost Market Loan Structure (Interest rate >= 9% per annum) as on April, 2015 ...... 50 Table 32: Year-wise Principal and Interest payment schedule (in Rs. Crore) as on April 2015 ...... 50 Table 33: Historical debt profile of Punjab ...... 51 Table 34: Year-wise break-up of market loan of Punjab ...... 51 Table 35: Interest rate-wise break-up of market loan of Punjab (in Rs. Crores) ...... 52 Table 36: Fiscal space in terms of NPV due to pre-payment of high cost market loan with Fresh Loan of tenure 10 years in Rs crore (for Loan with balance interest pay out period >=8 years) ...... 52 Table 37: Fiscal Space in terms of net present value due to pre-payment of the top 5 high cost loan (in Rs. Crore) ...... 53 Table 38: Year-wise Principal and Interest payment schedule for NSSF (in Rs. crores) ...... 53 Table 39: NSSF and Market Loan Share in Total Loan of Punjab Government (in Rs crore) ...... 54 Table 40: Benefits of replacing NSSF loan with market loan ...... 54 Table 41: Consumption of Petrol and Diesel in MT ...... 55 Table 42: Consumption and Cess Collection for 2015-16...... 56 Table 43: Optimum VAT rate calculation model ...... 57 Table 44: Estimated VAT collection from mobile sales ...... 58 Table 45: Sector wise number of Employees ...... 59 Table 46: Sector wise projected number of Employees ...... 59 Table 47: Estimated Professional Tax Collection for 2015-16 ...... 59 Table 48: Assumptions and basis for projection of receipts ...... 61 Table 49: Assumptions and basis for projection of expenditure items ...... 62 Table 50: Medium-term Fiscal Framework Projections for Govt. of Punjab (FY2016 to FY2018) ...... 64 Table 51: Budget Estimate as approved by the GOP in the Budget at a Glance for FY2016-17 ...... 65

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List of figures

Figure 1: Capacity building seminar on MTEF preparation conducted by the TA consultants for GOP officials held on 6-7 September 2018 in Chandigarh, Punjab ...... 19 Figure 2: Own Non-Tax Revenue as % of Total Own Revenue (2013 - 14 RE) ...... 26

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List of acronyms

Acronym Phrase Acronym Phrase ACS Average Cost of Supply HT High Tension ADB Asian Development Bank HVDS High Voltage Distribution System Integrated Financial Management ARR Aggregate Revenue Requirement IFMS System BOOT Build Own Operate Transfer INR Indian Rupees

CAGR Compounded Annual Growth Rate LT Low Tension CFC Central Finance Commission MSP Minimum Support Price CSO Central Statistics Organization MT Metric Ton Medium Term Expenditure CSS Centrally Sponsored Schemes MTEF Framework DA Dearness Allowance MTFF Medium Term Fiscal Framework National Land Records Modernization DEA Department of Economic Affairs NLRMP Programme Directorate Of Financial Resources and DFREI NSC Non Special Category Economic Intelligence DISCOM Distribution Companies ONTR Own Non Tax Revenue DT Distribution transformers OTR Own Tax Revenue ETC Excise and Taxation Commissioner PAU Punjab agriculture university FA Finance Accounts PDFP Punjab Development Finance Program FC Finance Commission PEV Price exclusive of VAT Fiscal Responsibility and Budget FRBM PIV Price inclusive of VAT Management Punjab State Electricity Regulatory FY Financial Year PSERC Commission Punjab State Power Corporation FYP Five Year Plan PSPCL Limited GCS General Category States RBI Reserve Bank of India GFD Gross Fiscal Deficit UDAY Ujwal DISCOM Assurance Yojana GoP Government of Punjab VAT Value Added Tax GSDP Gross State Domestic Product PAU Punjab Agriculture University

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1 Background and Program Objectives

1.1 Background The state of Punjab, over the last decade has experienced a relatively lower rate of economic growth as compared to the national average. It recorded an annual average growth rate of 6.74% in its real Gross State Domestic Product (GSDP) during the period 2005-06 to 2013-14 as compared to the national average of 7.61%. This low rate of growth has been associated with low and declining rates of capital outlays as % of GSDP. A comparison of capital outlay as % of GSDP (average of 2012-13 and 2013-14 RE) across non-special category states reveals that Punjab’s position is at the bottom, i.e. at 17th position out of 17 Non-Special Category States.

As learnt, revenue expenditure commitments which lead to inadequate fiscal space, have restricted the size of capital outlay as proportion of aggregate expenditure. While Punjab has fared reasonably well in generating own tax revenues driven by reforms in VAT, excise , stamps and registrations, its expenditure on committed items like salaries, interest payments and pensions, and across the board transfer payment and power subsidies have led to a deteriorating fiscal situation. Punjab’s revenue deficit during FY141 was 2.06% of GSDP, which was the third highest amongst the 17 Non Special Category (NSC) states and higher than the target set by 13th Central Finance Commission (CFC).

The Government of Punjab adopted the Fiscal Responsibility and Budget Management (FRBM) Act in 2003. Subsequently in pursuance of the fiscal consolidation path as recommended by the 13th CFC, Government of Punjab (GoP) amended the said Act in 2011 to maintain good fiscal health. Although Punjab has met the fiscal deficit targets as suggested by the 13th CFC, a cause of concern has been the quality of fiscal deficit in Punjab. The revenue deficit constituted more than 60% of the fiscal deficit in FY14 implying that GoP borrowings are being used to meet revenue expenditure. During FY14, Punjab’s primary deficit was 0.31% of GSDP, while its fiscal deficit was 2.8% of GSDP. This represents huge interest payments burden owing to high debt and other liabilities to GSDP. The 13th CFC had identified Punjab and two other states – Kerala and West Bengal as debt stressed states. Again in 2012 Rangrajan and Prasad have reaffirmed the classification by classifying Punjab as a high debt stress states – with a high debt/GSDP ratio and high interest payment to revenue receipt ratio.

In comparison to the 17 NSC states, Punjab’s fiscal situation thus calls for immediate attention and timely intervention before it becomes unsustainable. In the recent past however, Govt. of Punjab (GoP) has undertaken various steps to streamline and strengthen its tax administration to augment its revenue through better monitoring and management. The state has implemented an Integrated Financial Management System (IFMS) for efficient management of its funds/ expenditure and monitoring of the government accounts. In the Excise and Taxation department, government rolled out 32 IT modules for better management and administration of VAT and Excise.

Against this backdrop, to reinforce the Govt. of Punjab’s efforts in this direction and also to improve service delivery, Asian Development Bank (ADB) is providing assistance to GoP through a Punjab development finance program loan. 1.2 Program Objectives The Punjab Development Finance Program (PDFP) supported by ADB has been structured to support the GoP in fiscal consolidation by generating fiscal savings, and thereby assisting the state to augment and sustain growth-enhancing development financing (capital outlays). The objectives of the program are:

1 FY means financial year, FY14 means year 2013-14

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1. Better Fiscal management through Rationalisation of public expenditure. A Medium-Term Expenditure Framework (MTEF) would help in strengthening the budget and expenditure management through better utilisation of fiscal resources. A medium term fiscal framework (MTFF) would help in assessing the macro economic and fiscal condition of the state and addressing the concerns beforehand.

2. Expenditure rationalization: Expenditure rationalization through prudent use of critical resources would go a long-way in stabilising the state finances. Power sector poses fiscal pressure on the government. A change in behaviour by introducing demand management incentives backed by a public awareness campaign may help in reining the burgeoning expenditure.

3. Revenue reforms: One important prerequisite of fiscal consolidation is that state finances are augmented, to the extent possible, by own-revenue sources. Reforming the revenue stream is critical for augmenting own-revenue sources. The program focuses on improving state revenue efforts by rationalizing tax rates and thresholds of certain taxes, and introducing a new tax like Profession Tax.

The benefits of the PDFP are expected to be reflected in continued moderation in the key deficit targets. This is expected to ensure availability of more resources, in a sustained manner, in order to invest in social and economic infrastructure.

This program consists of a policy based loan of USD 200 million consisting of three-tranches. The first two tranches are of USD 50 million each and the final tranche is of USD 100 million. The first tranche was disbursed upon loan effectiveness in January, 2015. The policy actions related to release of second tranche were complied by the GOP in April 2018, and accordingly the tranche amount was disbursed by ADB in May 2018. The policy actions associated with third and last tranche, got complied by the GOP by 31 October 2018 and the amount is expected to be disbursed by ADB towards the end of November 2018.

The piggy back Technical Assistance (TA) for supporting the implementation of PDFP has been awarded to PricewaterhouseCoopers Private Limited, India (PwC). The PwC team was mobilized on 19 January, 2015 in Gurgaon and the support will contractually run until 31 December 2018. 1.3 Deliverables The deliverables under this TA support along with their respective timeframes are as below:

 Submission of Inception Report (submitted in May 2015): Presents a quick assessment of the progress made by GoP towards meeting the second tranche policy actions, and documents the activities undertaken by the TA consultants towards supporting GoP in meeting these actions. Confirmation on the scope of work, along with agreements on the project management and reporting mechanisms with necessary realignment of staffing, is also provided.

 Submission of the Interim Report (submitted in October 2016): The Interim Report illustrated the progress made by the GoP towards achievement of the second tranche policy actions as well as documented the status of select subsequent third tranche actions. It also included the outputs of the TA support up to that date.

 Submission of the Draft Final Report (DFR) (submitted in May 2017): The DFR built onto the Interim report and captured the progress made by the GoP on both second and third tranche policy actions since October 2016.

 Submission of the Final Report (this report): The Final report summarises the compliance status achieved by the GOP against all policy actions under second and third tranche of this policy loan program. It also presents the additional support provided by the TA under the program.

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1.4 Structure of the Report This Final report is the fourth milestone deliverable under the TA engagement. It is contained in two Volumes as separate documents.

This report is the Volume I and is structured as follows:-

 Chapter 1 (this chapter) presents the context of this project

 Chapter 2 presents the summary details of compliance status of GOP against the policy actions related to the second tranche

 Chapter 3 presents the summary details of compliance status of GOP against the policy actions related to the second tranche

 Chapter 4 presents the additional support provided by the Technical Assistance (TA) consultants’ team under this Program.

Volume II contained in a separate document, presents the details of Medium Terms Expenditure Frameworks (MTEFs) which the consultants helped develop for the four Departments of GOP, as part of one of the third tranche policy actions.

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2 Compliance status achieved against second tranche policy actions

As envisaged under the PDFP, there were seven (7) policy actions required to be complied by the GoP for release of the second tranche of the loan program. This was achieved by the GOP in April 2018. The summary of the achievement of these policy actions achieved by the GoP is elucidated below. 2.1 Rationalized Expenditures focusing on Power Subsidies 2.1.1 100% DT Metering

Policy Action No. 9 PSPCL to complete 100% metering on distribution transformers connected to agriculture power feeders to improve energy audit. (Document required: Report submitted by Power Department)

Background & Objective Electricity to agriculture consumers is supplied through dedicated feeders in Punjab. This has been achieved by segregating 11 kV (kilovolt) feeders for domestic and agriculture consumers. On each 11 kV feeder, there are multiple Distribution Transformers (DTs) which are the intermediate points of the distribution network (between the input feeder and the end consumer). The DT is used to step down the voltage from 11 kV to 0.4 kV for end consumption. It also acts as a segregator from which various consumer connections are extended.

However, in the absence of 100% agricultural consumer metering, the energy consumption and in turn the network losses are estimated on a sample basis which has its inherent limitations. This policy action aims at improving the energy audit and loss accounting methodology by completing 100% metering on distribution transformers connected to agriculture feeders. Metering of Distribution Transformers (DTs) was envisaged as they are the nodes nearest to the consumer on the network. This helps in extending the last metered point, thereby enhancing the accuracy of energy reconciliation.

Status

The policy action no. 9 envisaged 100% metering of agriculture DTs with the objective of improving energy audit for agriculture consumers, enhancing the accuracy of loss assessment, and therefore optimizing the subsidy requirement. However, several limitations were identified by GOP with 100% DT metering in terms of investment requirements, scale of coverage, management and maintenance expenses, and accuracy and effectiveness of energy loss accounting. Since the program inception, multiple measures, including implementation of High Voltage Distribution System (HVDS), have been taken by PSPSCL for reducing losses on agriculture power distribution and improving the energy accounting methodology. Keeping in view the HVDS roll out, additional investments towards installation of DT meters along with HVDS were not assessed as prudent enough by the GoP. Thus, representation for the waiver of this loan policy action was made to the Department of Economic Affairs (DEA), Ministry of Finance, Govt. of India (GoI), first in the meeting held in Jaipur on the 31 January 2016. Subsequently, the Additional Chief Secretary of Punjab sent the request to the DEA via (DO No. DFREI-FD (YP-II) 2016/956 dated 23 May 2016) to accept implementation of HVDS as a compliance to the tranche action. The letter provided the rationale for implementation of HVDS as an alternate strategy to DT metering. It mentioned that implementation of HVDS not only accomplishes the same objective with optimal utilization

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of resources but also significantly reduces losses on the network. Again through DO number 12/12/2012/3FB2/1129 dated 5 September 2016, GoP requested the waiver of policy action T2-A9 (i.e., 100% DT metering), indicating its plan to accomplish 45% coverage of HVDS by March, 2017. The target has taken into account the high capital requirement and other energy efficiency initiatives. Subsequent to the presentation of a technical note (inclusive of implementation plan) by GOP to the DEA which captured the technical feasibility and benefits of this new approach in comparison to the 100% DT metering, the alternative methodology in lieu of 100% metering was approved by the DEA of the MOF with concurrence from the Ministry of Power of the Government of India on 8 November 2017. Necessary reports on implementation of this alternative methodology were submitted by the GOP subsequently.

In pursuance, as of 15 December 2017, the GOP achieved: (i) a HVDS coverage of 45.9% (628,494 agricultural power connections out of 1.361 million connections), exceeding the target of 45% coverage corresponding to 611,000 connections; (ii) metering of 21.2% of distribution transformers on agricultural feeders (137,651 distribution transformers metered out of 649,000 distribution transformers), exceeding the target of 21%; (iii) metering 19.6% of agricultural power consumers, exceeding the target of 15%; and (iv) 100% end-to-end metering of targeted 86 kV agriculture feeders, randomly sampled out of 5,919 agriculture feeders. The TA consultants all throughout, helped the GOP in drafting the supporting documents and technical notes required in complying with the said policy action.

2.1.2 Agricultural Power Subsidy Targeting Plan

Policy Action No. 10 GOP to notify an agricultural power subsidy targeting plan selected from the alternative plans provided in the strategy paper and to commence implementing the selected plan. (Document required: Copy of the notification and an action taken report issued by Power Department)

Background & Objective To improve the targeting of power subsidy in the State, a strategy paper had been developed by the GoP which laid out two options for implementing a scheme on optimizing power supply to agriculture consumers:

Option 1: Restricting power supply to agriculture consumers as per the 'normative supply hours' requirements of the zone. Option 2: Free Supply of Power up to 'normative energy consumption' and incentivising metering.

Government of Punjab (GoP) after several discussions with Punjab State Power Corporation Limited (PSPCL) and other stakeholders had opted for Option 1, wherein power supply to agriculture consumers would be restricted as per the normative supply hours. In order to determine the normative supply hours, the Punjab Agriculture University (PAU) was engaged to conduct a study for estimating the electrical tube well operating time for groundwater for the Kharif season 2014-15 and Rabi season 2013-14. The report submitted by them in September, 2015 stated the need to take additional initiatives to curtail the groundwater pumping and reduce energy consumption, which would also have a direct bearing on the subsidy being paid out, Further, the report stated that the use of groundwater should be reduced to the extent possible and the number of working hours for the tube well should be restricted to save groundwater. Based on a detailed analysis of data (type of crop, capacity of tube well motors, ground water depths, area under irrigation etc.) under various scenarios, the Directorate of Research of the PAU submitted its recommendations on normative supply hours for various types of crops and seasons.

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Status The Govt. of Punjab indicated its preference for Option 1 from the two options in the Strategy Paper. Based on these recommendations. a gazette notification was issued by Department of Power, GOP (vide Notification No.1/33/08-EB (PR)/653 dated 12 October 2015 published in the Official Gazette on 14th October, 2015) for the schedule of power supply of the Agriculture Pump set connections in the State as per different crops and seasons. It was valid until 31 March 2016.

Subsequently, a fresh notification No. 1/33/08-EB (PR)/194 was issued on 25 March, 2016 for FY 2016-17. The notification was based on the recent study carried out by the Agriculture Department on the basis of which the schedule of power as mentioned in the table below was drawn upon. The power supply hours shall be generally followed, however keeping in view weather conditions i.e. drought like situation, excessive rains, and floods or due to other reasons beyond control, ssupply hours can also be modified accordingly so that the crops of the farmers do not suffer. The power supply hours to vegetable, floriculture, horticulture farming may vary according to requirement of the crop and season.(Power department has submitted the related study, which PAU has prepared previously to the Finance department through email on 5 January, 2016.)

The policy action has been complied with and the GoP submitted the following documents:  Supply hours Gazette Notification (as noted above);  Cover Letter for the study carried out by the Punjab Agriculture University;  Study by the Punjab Agriculture University on normative requirements for agriculture as per the policy action;  Response Letter by the Power department to the Govt. of Punjab;  A fresh notification indicating continuation of the scheme.

Period in FY2016-17 Timings a) 1 April to 14 June . 8 hours Power Supply on alternate days. b) Exception to above: 20 . With the exception to above that the feeder having more the 50% area April to 20 May under cotton or other kharif crops should be provided with 8 hours daily electricity from (20th April to 20th May) and the extra power supplied can later be adjusted. 15 June to 30 September 8 hours Power Supply per day. 1 October to 31 March 10 hours power Supply on alternate days.

2.1.3 Public Awareness Campaign

Policy Action No. 11 GOP to implement the public awareness campaign to facilitate implementation of the selected agricultural power subsidy targeting plan. (Document required: Report prepared by finance Department on the public awareness campaign)

Background & Objective

Punjab is primarily an agrarian state; however the share of Agriculture in Punjab’s GSDP has been falling continuously (from 32% in FY 2008-09 to 27% in FY 2013-14) despite the use of enhanced technology and improved investments in the sector. This decline can be attributed to no significant growth in the agriculture crop production. Food grain production that comprises of a majority of the output, has increased by a mere 6% in the period, clearly showing signs of plateauing and reaching a saturation point. Within the food grains category, Punjab is majorly dependent on rice (production increased by 2% in the five year period) and wheat (production increased by 8%), which constitute almost 98% of the food grain production. These crops dominate 80% of the cropped area because of low production risks and negligible marketing risks (due to procurement at Minimum Support Prices (MSP)). This over dependency has also resulted in some major challenges being faced by the State such as having a cropping intensity of approximately 200%.

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Intensive land usage under the two primary crops has resulted in rapid depletion of ground water table, mainly in Central Punjab. The farmers are now making greater investments to replace shallow tube-wells with centrifugal pumps and deep tube-wells with submersible pumps. This leads to an increase in the consumption of energy for pumping water from greater depths, and since the electricity is free, there is no incentive for saving electricity or water.

Thus, an urgent need was felt to undertake serious measures to ensure conservation of water and energy. Conscious steps taken in this direction are expected to not only help save natural resources, but also provide the government with flexibility of diverting resources to benefit the development of the State. Using properly sized pumps, avoiding wastage of water, storing water, and avoiding over flooding of fields may prove to be directly beneficial to farmers. In order to communicate this message on Conservation of Water to the farmers more effectively, the GoP decided to run a public campaign for spreading awareness on the subject and sensitise the population on the impact of wastage of water as well as the steps which can be taken to prevent this.

The campaign as designed is envisaged to be rolled out in three following rounds to maximise its impact:  Round 1 (Sensitise): On the urgent need of conservation of water (before filing the Tariff petition with PSERC)  Round 2 (Motivate): To make prudential use of water and energy resources by targeting improved utilisation of power subsidies (after filing the Tariff petition before PSERC)  Round 3 (Educate): On actual implementation modalities of the scheme, and various channels for improved utilisation of power subsidies (post PSERC Tariff order)

Status

Round 1 campaign were held during February 01, 2016 and February 21, 2016. Multiple channels, viz. radio, print and loudspeakers were used as modes of advertisements to spread the water conversations awareness message during the period as follows:  Advertised in the My FM and Big FM radio stations of Jalandhar and Amritsar  Regular advertisements given at the bus stands at Bhatinda, Patiala, Sangrur, Talwandi, Faridkot, Kapurthala, Phagwara, Moonak, Patran, Ahmedgarh and Budhiadha  Print advertisements run in the widely circulated newspapers in Punjab, viz. Punjab kesri, The tribune, Jagbani and Ajit. Frequency of the advertisements was 3 to 6 times between February 01, 2016 and February 21, 2016.

Also, GoP has submitted the following documents to ADB:  ADB LOAN- awareness campaign final (dated 1st February, 2016).  Campaign Rollout (dated 1 February, 2016).  News-paper Campaign (dated 1 February, 2016).  Radio Campaign invoice for State wide Public Awareness Campaign (dated 21 February, 2016).  Bus Stand Campaign invoice for State wide Public Awareness (dated 22 February, 2016).

The Govt. of Punjab in accordance, submitted an Action Taken Report on above to ADB on 19 July 2016 via Letter No. 2/1/2016-3FBII/799426/1, and the policy action has been complied with.

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2.1.4 Implementing a System of Demand Forecasting by PSPCL

Policy Action No. 12 PSPCL to (i) implement a system of demand forecasting and energy requirement to manage short- and long-term power purchase costs in an effective manner, and (ii) include the same in its petition to PSERC. (Document required: Petition submitted by PSPCL to PSERC on demand forecasting and energy requirement)

Background & Objective This policy action required the PSPCL to introduce a demand forecasting system to optimise its power procurement cost, thereby improving the performance of the Distribution Company. This would enable the utility in better planning for their power procurement leading to optimised power purchased costs and demand planning.

PSPCL developed an IT Tool Based System for forecasting power demand in the state across consumer categories. The system was developed by using historical data and based on an econometrics model, taking into account historical data, key trends and factors. The primary objective of the system is to accurately forecast power demand thereby effectively managing short term and long term power purchase costs and also reducing any additional cost burden owing to higher short term power costs. The data from this system has been utilized for tariff determination and included in the tariff determination to PSERC for FY 2016-17.

PSPCL has projected energy requirement to the tune of 53,054 MU's (Mega Unit) based on three year CAGR as per the PSERC Regulation. It has submitted that the actual consumption will depend on weather conditions and therefore sales may vary by 2% (+/-).

Status Demand forecasting method has been implemented and this information has been used to file petition before PSERC, and therefore the policy action has been complied with. The Aggregate Revenue Requirement (ARR) and tariff petition for the financial year 2016-17 ( under regulation 13) was filed before the PSERC by the Chief engineer (ARR and TR) of Punjab State Power Corporation Limited (PSPCL) on 26 November 2015. The following requisite documents were duly submitted to ADB for reference as a proof of this.  PSPCL response on demand forecasting (dated 2 February, 2016)  Complete petition copy filed to PSERC  Proof of submission of petition to PSERC. 2.1.5 Action Plan for PSPCL Debt Restructuring

Policy Action No. 13 Power Department to approve a time-bound action plan for PSPCL debt restructuring to facilitate funds mobilization from the market and improve power supply and to commence implementing the plan. (Document required: A copy of the debt restructuring action plan and an action taken report issued by Power Department)

Background & Objective

Punjab State Power Corporation Limited (PSPCL) had huge amount of outstanding loans on its books, primarily due to previous losses that were not allowed by the Regulator. As a result, its interest costs put a huge burden on the Discom’s performance and tariff. In order to break this vicious circle, a debt restructuring plan was envisaged to improve the performance of State DISCOMs. In this regard, the GOP signed a Memorandum of Understanding (MoU) with Government of India and the Punjab DISCOM (tripartite agreement) under the Government of India Debt restructuring scheme, viz. Ujwal DISCOM Assurance Yojana (UDAY) for State

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owned Power Distribution Companies. The MoU which was made on 4 March 2016, laid down a time-bound action plan by PSPCL and the Department of Power, GoP for restructuring its debt and achieving a financial and operational turnaround.

Status

An Action Taken Report post signing the Tripartite MoU was submitted by the Principal Secretary Power to Department of Finance, GOP vide. 1/8/2012-BBCRR/498 dated 7 June 2016. Key extracts from the same are reproduced below: 2015-16 :  Out of loans of Rs.10418.84 crore to be taken over by GOP by March 31,2016, bonds of Rs.9859.72 crore have been issued.  Bonds for remaining loans of Rs.559.12 crore could not be issued as consent from 3 banks Bank of Baroda, Bank of India & Dena Bank was not received.  Funds raised by GOP by issue of special bonds were transferred to PSPCL as GOP loan. Loans of PFC, REC and Commercial banks in the books of PSPCL stands repaid on March 31, 2016 and replaced by GOP loan. Path for 2016-17:

 Debt amount to be taken over by GOP by September 30,2017 — Rs. 5768.54 crore including balance debt amount of Rs. 559.12 crore for FY 2015-16.  GOP has already been requested for making budget provision in FY 2016-17 for issuance of Non-SLR Bonds of Rs. 5768.54 crore.  Banks/Financial Institutions have been requested for conveying consent for conversion of remaining 50% debt into loans or bonds with Interest rate not more than Bank Base Rate plus 0.1 %. GOP has already been requested to seek approval from Department of Expenditure, Ministry of Finance, Government of India for giving permission to issue Non-SLR Bonds of Rs. 5768.54 crore during 2016- 17.  GOP has already been requested to clear pending dues of electricity around Rs. 500 crore from GOP depts. Loans amounting to Rs. 15628.26 cr. to be taken over by state (Rs. 9859.72 crore already taken over in 2015-16 & remaining Rs. 5768.54 crore to be taken over in 2016-17) to be treated as GOP loan in the books of PSPCL up to FY 2018-19 and to be converted into grant of Rs. 11728.26 crore and equity of Rs. 3900 Crore in 5th year i.e. 2019-20. GoP has complied with the policy action and shared the following documents with ADB:  MoU between Ministry of Power and Govt. of Punjab (dated 4 March, 2016).  Signed copy of MoU - GoI, GoP and PSPCL  Action Taken Report by Power Department (dated 7 June, 2016).

2.2 Improved Revenue Efforts 2.2.1 Profession Tax draft bill

Policy Action No. 14 GOP to submit the profession tax bill to the State legislature. (Document required: copy of the profession tax bill submitted to the State legislature)

Background & Objective

The primary objective of introduction of profession tax in the State of Punjab was to enhance state’s own tax revenue effort. Punjab’s revenue effort had remained buoyant in relation to other states in India. Total revenue

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is contributed entirely by own tax revenue, non-tax revenue, central devolution of taxes and grants from the centre. However, Punjab’s own-tax revenue to GSDP ratio decreased from 7.9% in FY2012 to 6.8% in FY2014. The CAGR (compounded annual growth rate) of own-tax revenue (OTR) in the state of Punjab for the 5 year period from FY 2009-10 to FY 2014-15 has been 16.3%. However, in other states like Haryana, Bihar Gujarat, West Bengal, the CAGR for the 5 years has been 17.9%, 25.3%, 20.5% and 20.7% respectively. The GoP thus undertook several steps to strengthen its tax administration and augment its revenue through better monitoring and management in recent years, there exists immense scope to further its strengthening.

One of the initiatives envisaged to further increase its revenues comprise introduction of the Professional tax by the GoP. A Tax on Profession is among several other taxes which falls under the purview of the State Legislature but is not being levied by the State Government of Punjab. There are 21 states in India at present where this tax garners a substantial amount of revenue. The 14th Central Finance Commission (CFC) too has recommended increasing the Profession tax limit from Rs. 2500 per annum to Rs. 12,000 per annum. Therefore, it could be a major source of revenue for GoP and Punjab has a significant potential to garner revenue from this tax.

Status The TA consultants conducted a benchmark study on the inter-state comparison of the profession tax schedules and submitted the report to the GOP for necessary reference. After necessary internal approvals and vetting by the legal department, the Punjab Vidhan Sabha Secretariat (i.e. state legislature) passed the ‘Punjab State Development Tax Bill (2018)’ which includes profession tax, during its FY 2018-19 budget session on 26 March 2018. The Bill enables the State Government to levy and collect Rs 200 per month (i.e. Rs 2400 per annum) on an income taxpayer, who is a government employee and any other person, engaged in professions, trades, callings and employment. This policy action has thus been complied with by the GOP. 2.2.2 Digitization of Land Records

Policy Action No. 15 Revenue Department to complete the digitization of land records for all areas of the state. (Document required: Report on completion issued by Revenue Department)

Background & Objective

Importance of a modern and efficient land records system brings clarity on land ownership aspect and is thus recognised essential for ensuring a harmonious and progressive society.

Land being the costliest asset in the State of Punjab is often at the epicentre of land fights, property crimes and frauds such as property tax evasion, property registration fee fraud, land ownership issues etc. Digitisation of land records streamlines the entire land records and ensures transparency on land transactions. Digitisation of land records, apart from providing conclusive titles to land owners and speeding up the process of land acquisition, is expected to strengthen revenues efforts through improved property tax billing and collection.

Status

The GoP completed 100% digitization of land records of rural villages of Punjab. Land records refer to the land in rural areas, because in the urban clusters, there are property records which are not classified as land records.

It may be noted herein that this project of computerization of land records falls under the ambit of ongoing 100% centrally sponsored scheme (i.e. centre sector scheme) called the ‘National Land Record Modernization Programme (NLRMP)’ [rechristened now as the ‘Digital India Land Records Modernization Programme

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(DILRMP)’] of Government of India. However, concrete efforts were made for implementation of the project in the year 2005 when it was decided by the Revenue Department to implement the project on PPP model under the then operational schemes of “Computerisation of Land Records (CoLR) (100% central assistance)” and “Strengthening of land records” (50:50 fund sharing pattern).

The project had envisaged to open a FARD Kendra at each Tehsil and sub-Tehsil level. Revenue record like Jamabandi, mutations, rapats, roznamchas etc. of all villages of that Tehsil/ sub-Tehsil have been fed into the computer. Every FARD Kendra (165 FARD Kendras) has also its own server to save all records. The Revenue department has replica of all 165 FARD Kendra records.

Further, for the convenience of public, the Department of Revenue, Rehabilitation and Disaster Management has now put land records data on web portal and hence with any sale/ purchase of land, the landowner details are updated. Anybody can access the data from anywhere and take a printout of own land record from website. www.punjabrevenue.nic.in (FARD). Users have search facility to search any document and can search by district, Tehsil, village and year.

Towards compliance of this policy action, a letter along with completion report was issued by the Special Secretary Revenue and addressed to Secretary Expenditure of Finance department of GoP on 5 July 2016 (vide. PM/PLRS/2016/53/106).

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3 Compliance status achieved against third tranche policy actions

As envisaged under the PDFP, there were seven (7) policy actions required to be complied by the GoP against third tranche of the policy loan program, PDFP. By 31 October 2018, the GOP has achieved full compliance on 5 of the policy actions, while the remaining 2 policy actions (nos. 21 and 22) have been assessed as substantially complied since no action was warranted from GOP due to some developments at national level in India.

The current status as achieved by the GoP against those is elucidated below. 3.1 Improved Capacity for Fiscal Management 3.1.1 Adoption of FRBM Rules

Policy Action No. 16 FRBM rules adopted by GOP (Document required: GOP notification of the FRBM rules).

Background & Objective The Government of Punjab adopted the Fiscal Responsibility and Budget Management (FRBM) Act in 2003. Subsequently in pursuance of the fiscal consolidation path as recommended by the 13th Finance Commission, GoP amended the FRBM Act in 2011. However, the Rules associated with the Act, which often specify the targets against fiscal key indicators and elaborates on procedures have not yet been adopted by the GoP.

Status

The TA consultants had prepared the draft of FRBM Rules, basis the FRBM Act of GOP and Rules of other State Government in India, in due consultation with the Budget Branch-I and submitted to the Finance Department.

After necessary processing and approval of the draft Rules and subsequent vetting from the legal department, the GOP approved the Fiscal Responsibility and Budget Management (FRBM) Rules, 2018 to strengthen the state government’s commitment to achieve prudent fiscal management in line with the Punjab FRBM Act, 2003. Notification No. G.S.R. 73/P.A.11/2003/S.7/2018, dated 27 September 2018, containing the FRBM Rules, 2018 was published in Punjab Government Gazette on 1 October 2018. The Gazette Notification is accessible via the GOP website www.punjab.gov.in (under Acts, Rules and Norifications). This policy action thus has been complied with.

3.1.2 Medium Term Fiscal Framework (MTFF)

Policy Action No. 17 MTFF for FY2016-FY2018, which provides a reasonable enhancement of capital outlay (as a percentage of GSDP) over the baseline scenarios, prepared and approved by Finance Department to ensure adherence to realistic fiscal targets (Document required: Copy of the MTFF approved by Finance Department).

Background & Objective

Budgeting in the GoP is on annual basis. As part of the ADB PDFP, one of the identified program reform areas is improvement in GoP’s capacity for fiscal management, to be realised essentially through rationalisation of

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public expenditures by introducing medium term fiscal planning. To this end, development of a medium-term expenditure frameworks for select departments was conceptualised which is consistent with top-down medium term fiscal framework (MTFF).

MTFF typically comprises forecasts of both revenues and expenditures of the Government (usually three years) and is essentially a quantitative statement of the Government’s fiscal strategy. Such a framework contains a targeted path of fiscal aggregates (e.g. on revenue balance, fiscal balance, outstanding debt), which is consistent with medium term fiscal sustainability, thereby enhancing feasibility of government’s fiscal objectives. It may be noted herein that at the Government of India level, MTFF is encapsulated in the form of the ‘Medium- term Fiscal Policy Statement (MTFPS)’ which is presented to the Parliament under Section 3(2) of the Fiscal Responsibility and Budget Management Act (FRBMA), 2003. The MTFPS sets out the three-year rolling targets for four specific fiscal indicators in relation to GDP at market prices (targets consistent with what is stipulated in the FRBMA), namely: (i) Revenue deficit, (ii) Fiscal deficit, (iii) Gross tax revenue, and (iv) Total Outstanding Central Government Debt at the end of the year, along with an explanation of the assumptions underlying these estimates.

For the GoP, the policy action required a MTFF which, while ensuring adherence to realistic fiscal targets, also provides scope for reasonable enhancement of capital outlay (as a percentage of gross state domestic product [GSDP]) over the baseline scenario. The exercise thus entails analysis of historical data along with an assessment of implications of future policies on fiscal parameters.

Status

The TA consultants had prepared draft MTFF in consultation with the Finance Department, GoP and a power point presentation was given to the Principal Secretary (Finance) and other key officials of the Department of Finance, GoP on 21 January, 2016 on the same. A revised draft was submitted to the Department of Finance in 9 March, 2016 after incorporating the suggestions received from them. The MTFF prepared for FY2017-19 was then duly approved by the concerned officers of Department of Finance, Government of Punjab on 9 March, 2016. The estimates for FY 2016-17 are duly reflected in the State Budget Document for FY 2016-17, closely in line with the MTFF projections.

With this, the policy action was complied with by the GOP. The content of approved MTFF are given in Annexure A of this report.

3.1.3 Medium Term Expenditure Frameworks (MTEFs)

Policy Action No. 18 Gender-responsive MTEFs for health, education, power, and public works departments, which are consistent with MTFF, finalized and approved by Finance Department, and budget allocations for these departments made for FY2016 based on MTEFs (Document required: MTEF reports and budget allocations statement as approved by Finance Department).

Background & Objective

Medium Term Expenditure Framework (MTEF) is a public expenditure planning exercise that sets out future budget requirements for existing services, and assesses resource implications of future policy changes. The tool of MTEF provides linkages among policy, planning and budgeting over a medium-term period, usually spanning next 3-5 years. Keeping in view the priorities and stated government goals/ objectives, the MTEF provides the overall framework guiding the budgetary allocations towards implementing initiatives/ measures towards attaining those objectives/ goals over the medium-term.

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Further, in a state like Punjab, where gender ratio is quite adverse in the country, a gender responsive MTEF can improve gender sensitivity in budget planning. This includes an assessment of the implications of the public spending and revenue-raising specifically on empowerment and improvement of condition of women.

Status

The TA consultants prepared draft Medium Term Expenditure Framework (MTEF) reports for the Department of Health and Family Welfare, Department of School Education, Public Works Department and Department Power in consultation with the concerned departments during April 2015 to January 2016. A power point presentation was given to the Principal Secretary (Finance) and other key officials of the Department of Finance, GoP on January 21, 2016. The draft report and the outcomes were also discussed with the respective departments in February, 2016 after which the reports were duly submitted to the Department of Finance in March, 2016 for consideration.

The draft MTEFs prepared for the four departments got duly approved by the Finance Department of GOP on 9 March 2016. Approved budget allocations for FY2016-17 by the GoP were closely in line with the MTEF projections. This policy action has thus been complied with.

The approved drafts are presented in the Volume II of this PDFP Final Report.

It may also be noted herein that a capacity-building seminar on MTEF preparation with hands-on applications and case studies was also provided by the TA consultants (led by the MTEF specialist, Ms. Aashima Verma) on 6-7 September 2018, to 97 government officials from each department of GoP. The overall approach towards delivery of this Program, along with select training material used is presented in in Chapter 6 of this report.

Figure 1: Capacity building seminar on MTEF preparation conducted by the TA consultants for GOP officials held on 6-7 September 2018 in Chandigarh, Punjab

3.1.4 Employees’/ pensioners’ electronic database

Policy Action No. 19 Comprehensive electronic database on GOP employees and pensioners prepared by Finance Department for better public expenditure planning and targeting (Document: Report on database prepared by Finance Department).

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Background & Objective

The objective of comprehensive electronic database on GoP employees and pensioners is to provide centralised information on total number of employees along with service details and also of retirees in near future. This is expected to help in better planning and targeting of such expenditure in the following way. A comprehensive computerised database maintains legacy data of all government employees in an electronic database, thereby facilitating tracking of public expenditure so that all government resources - money and manpower - are utilised in a productive and efficient manner.

Status on comprehensive electronic database on GOP employees

With a view to establish proper financial management, the 13th Central Finance Commission (CFC) of India had advised the State Governments to create Centralized Pensioners and Employees Database. Subsequently, as per the Government of India (GOI) directions for building the employee database, the Department of Governance Reforms (GR) of GOP was asked to implement the project in 2014. The GR Department further allotted the work to National Informatics Centre (NIC), who were to implement the ‘Manav Sampada’ software, already implemented in the State of Himachal Pradesh, in Punjab after its customisation. Accordingly, the NIC – Punjab was directed to submit the proposal for iHRMS (Integrated Human Resource Management System) during a review meeting under the chairmanship of the Chief Secretary, Punjab on 9 Jan 2015. NIC submitted the proposal on 6 Feb 2015, which was approved by the Government of Punjab (GoP) in March 2015. The project development ensured thereafter.

Further, as per decision taken by the GOP in March 2015, employee data was captured online from base service record, i.e. service book of an employee. The basic details were captured initially besides service history details from cut-of-date of 1-4-2015 (i.e. service history details of all employees captured from 1 April 2015 onwards). Once the capture of service record data from 1-4-2015 is complete, service record of prior years’ are entered as per the directions of the GoP.

As on 3 September 2018 (status submitted to GOP to ADB towards compliance), against 380,870 employees from 34,894 offices of GoP located across the State, basic detail entry is complete for 368,179 employees (97% of total employees) and service books have been verified for 353,754 employees (96% of basic employee entries and 93% of total entries). 381 service books are pending verification as of 3 September 2018. As this is a live database, department-wise real time progress is available at http://hrms.punjab.gov.in/ReportSummary/DeptWiseDataEntryStatus.

It is noteworthy that since April 2018 onwards, employees of the GOP (including local bodies) are getting their salaries disbursed from the iHRMS. In continuation of its commitment to fiscal prudence, the GOP closely monitors the salary expenditures as a share of state budget expenditures, which is projected to decrease from 33% in FY2018 RE to 27.7% in FY2019 BE.

Status on comprehensive electronic database on GOP pensioners

An electronic Master Pensioners’ Database for GOP was created under the Integrated Financial Management System (IFMS) pension module. The electronic database is linked with the records of the Accountant General, Punjab, district treasury offices, and the pension disbursing banks.

Under the PDFP, entries of 577,000 pensioners stored in the IFMS pension module have been purified to make the database more accurate and reliable. Following the deduplication and verification exercise which concluded on 31 October 2018, the records for 287,757 pensioners across all districts have been streamlined under the IFMS – these were updated using latest records from subsidiary treasury registers and banks.

In line with the GOP’s commitment to improve expenditure management, the electronic pensioners database enables monitoring of pension payments from 22 district treasury officers with efficient tracking and

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validation of disbursements against pensioners’ records. Additionally, the database improves fiscal planning and predictability of pension expenditures for estimating state’s cash flow requirements.

For both these employees’ and pensioners’ electronic databases, the TA consultants provided the necessary support to the GOP in drafting detailed reports capturing the details of implementation of the systems, including the realised/ expected benefits emerging out of the implementation.

This policy action has thus been complied with by the GOP.

3.1.5 Implementation of treasury cash flow forecasting methodology

Policy Action No. 20 Finance Department to implement a treasury cash forecasting methodology and its integration with debt management module, to reduce dependence on unplanned short-term borrowings (Documents required: Treasury cash forecasting concept note and a status report on implementation as approved by Finance Department).

Background & Objective

The State government’s finances have been under strain for long with persistent significant revenue deficit of more than 2% of GSDP since FY2007-08. Consequently, its capacity to spend on capital investments has been constrained in order to keep its fiscal deficit reasonable at around 3% of GSDP. It debt to GSDP ratio has also been substantial at more than 30% of GSDP.

Besides overall debt burden characterised with substantial magnitude of committed liabilities (i.e. revenue expenditure components of salaries, pensions and interest payments), there have been several instances wherein the GoP had faced severe liquidity pressures intra-year (i.e. shortfall in cash balances) due to which it had taken recourse to unplanned short term borrowings. These sources of short term borrowings to meet emergent funding requirements often include availment of ways and means advances (WMA) – both normal and special and overdrafts (ODs) from the Reserve Bank of India (RBI) with intermittent fluctuations.

This need for unplanned nature of short-term borrowings cause administrative chaos besides being expensive, under which much of effort of officers go in identifying and managing the funding shortage requirements often at the cost of other crucial official matters. It thus becomes imperative to forecast the cash balances situation beforehand to avoid such situations which have the potential of disrupting the normal course of work.

Status

The GOP introduced the IFMS in 2013. Under the PDFP, the cash management sub-module is integrated as part of debt management module under IFMS and is being used for treasury cash forecasting purposes.

The TA consultants reviewed these sub-module/ modules of IFMS and in due consultations with the Finance Department, suggested ways to enhance effectiveness of the cash management sub-module. For the purpose, the TA consultants helped draft a Concept Note, which was subsequently approved by the GOP in July 2018.

In line with the suggestions, the GOP implemented two measures to improve the cash forecasting process, namely : (i) monthly fund flow variation statement; and (ii) system alert for monthly adjustments in forecasts. The TA consultants supported the GOP in drafting the implementation report, which provides details of this implementation, and documents the benefits expected to be realised by GOP in the short and long-term consequent to these.

With submission of implementation report by the GOP to ADB on 28 September 2018, this policy action got complied with.

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3.2 Improved Revenue Efforts 3.2.1 TDS for works contracts

Policy Action No. 20 Finance Department to reduce threshold limit for deduction of tax at source for works contract (Document required: Copy of the Finance Department notification)

And,

3.2.2 Revision of turnover tax rate

Policy Action No. 21 Finance Department to benchmark the turnover tax rate in the comparable states and revise the turnover tax rate appropriately (Document required: Copy of the Finance Department notification)

Status

Following a major structural reform in the indirect tax administration, the Goods and Services Tax (GST) was introduced by the Government of India with effect from 1 July 2017. It is applicable throughout India and has replaced multiple cascading taxes levied by the central and state governments, thereby paving the way for a single national market. It was introduced as ‘The Constitution (One Hundred and First Amendment) Act 2016’, following the passage of Constitution 122nd Amendment Bill. In line with the federal nature of the Indian economy, a dual GST model has been introduced whereby a Central Goods and Services Tax (CGST) and a State Goods and Services Tax (SGST) is levied on the taxable value of every transaction of supply of goods and services.

As the dual GST model is applicable across the country, the earlier regime of differential state-specific tax types/ structures/ rates has been discontinued. As a resultant, the two taxes under the said policy actions, namely: (a) deduction of tax at source for works contract and (b) turnover tax rate as specified under T3–A21 and T3–A22 of the PDFP got subsumed under the GST regime, and any separate action was outside the jurisdiction of the Government of Punjab.

Thus, these two policy actions have been treated as substantially complied by GOI/ ADB for third tranche release purpose. In this context, the TA consultants had helped the GOP in preparing a technical note for onwards submission to ADB, on how these two taxes are being treated under GST thereby providing necessary substantiation.

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4 Additional inputs of the TA

In addition to providing support to the GoP officers in undertaking necessary activities required for complying with the aforementioned second and third loan policy tranche actions, the TA consultants also contributed in the following studies based on the request received from the Finance Department, GoP. 4.1 Non-Tax Revenue Analysis On request of the Finance Department, GoP, the TA consultants conducted a study on the components of non- tax revenue. The objective was to assess the revenue and expenditure for different sectors and suggest accordingly suitable measures to enhance revenue and rationalize expenditure. As part of the study, the consultants conducted discussions with various departments of Government of Punjab during May-August, 2015 and subsequently submitted the report to the Finance Department in September 2015. Subsequently, a presentation was given to the Secretary, Expenditure and other officials of the Department of Finance on July 23, 2015.

The report as submitted to the Finance Department is produced below. 4.1.1 Introduction

The Non-tax revenue (NTR) comprises three major sources viz. Administrative services, grant from Centre and other revenue such as interest and dividend revenue. There are over 100 departmental sources of non-tax revenues in different States which are classified under major heads and sub heads.

Administrative Non-tax Receipts: This source accounts for about three-fourths of the States’ own non-tax revenue. In the future, this is likely to be the most productive and reliable source of non-tax revenues for the States. There are three broad components of administrative receipts, viz. general services, social services, and economic services. a) Revenue from General Services: General services includes receipts from Public Service Commission, Police, Jails, Supplies and disposals, Stationery and printing, Public works, Other administrative services, Contribution and recoveries towards pension and other retirement benefits, and Other miscellaneous general services. b) Revenue from Social Services: Theses includes receipts from Education, sports, arts and culture, Medical and public health, Family welfare, Water supply and sanitation, Housing, Urban development, Information and publicity, Labour and employment, Social security and welfare, and Other social services. c) Revenue from Economic Services: The major items that come under this class are Crop husbandry, Animal husbandry, Dairy development, Fisheries, Forestry and wild life, Co-operation, Other agricultural and rural programmes, Special area programmes, Major and medium irrigation, Minor irrigation, Village and small scale industries, Industries, Non-ferrous mining and metallurgical industries, Roads and bridges, Tourism, and Others. d) Grants from Centre: This is one of the important revenue source for the state under which state receives almost half of the total non-tax revenue. e) Interest and Dividend revenue: These two sources contribute marginally to the state.

4.1.2 Component-wise Analysis of Each Service

Major contributor in n0n-tax revenue is Grants from Centre. Its share in n0n-tax revenue was almost 65% followed by General Services 18% in 2014-15 (RE). The social and economic services share was almost equal 6.3% and 6.7% respectively in NTR in 2104-15 (RE).

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Table 1: Component-wise Non-tax Revenue (NTR) (Rs. crores)

Share in NTR Share in NTR Components 2013-14 2014-15 (RE) (%) (%) General Services 1940 29.4% 1621 18.1% Social Services 485 7.4% 564 6.3% Economic Services 590 9.0% 600 6.7% Grants from Centre 3401 51.6% 5808 64.7% Dividend & Profits 1 0.0% 2 0.0% Interest Receipts 175 2.6% 180 2.0% Total 6593 8982 Total ONTR 3191 48% 2967 33% Source: State Finance, RBI; *ONTR as percentage of NTR

4.1.2.1 Detailed Component-wise Analysis of Each Services

General services, social services and economic services are included for further analysis. General services which were the most prominent contributor towards non-tax revenue were further divided into their sub-components in Table 2. The miscellaneous general services contributed maximum (around 86%) of the total general services revenue. Stationeries, public service commissions, supplies and disposal and jails were the insignificant contributors. The share of overall general services and almost all others declined in FY 2014-15 (RE) as compared to FY 2013-14, whereas the share of Stationery and Printing increased marginally in the same period.

Social services which had a modest contribution towards the non-tax revenue were further divided into their sub-components (Table 2). Education, Sports, Art and Culture, Medical and Public Health, Urban development and Water Supply and Sanitation were the top contributors, whereas housing and Information and Publicity lied at the bottom. The four major components constituted more than 95% of the revenue in this section for FY 2014-15 (RE). Education, Sports, Art and Culture with 30% share was the top contributor. This was followed by Medical and public health with 28% share, Urban Development with a share of 27% and Water Supply and Sanitation with 10% share. Family Welfare and Housing contributions declined significantly in FY 2014-15 (RE) as compared to FY 2013-14.

In Economic Services, Road transport contributed maximum among all, followed by Non-ferrous Mining and Metallurgical Industries and rural development programs as illustrated in Table 2. Industries and Non-ferrous Mining and Metallurgical Industries were lacking behind, they collectively constituted only 8% and 15% in FY 2013-14 and 2014-15 (RE) respectively. Road transport with 30% share was the top contributor. The contribution of road transport suffered significantly over the year. However there were minor improvements in some areas like industries, forestry and wildlife and civil supplies.

Table 2: Detailed Analysis of Major Components of Each Service (Rs. crores)

Share* Share* Components 2013-14 2014-15 (RE) (%) (%) General Service 1940 1621

Public Service Commission 16 0.8% 2 0.1% Police 55 2.8% 55 3.4% Jails 22 1.1% 16 1.0% Supplies and Disposals 0 0.0% 0 0.0% Stationery and Printing 1 0.1% 13 0.8% Public Works 47 2.4% 16 1.0% Other Administrative Services 103 5.3% 63 3.9% Contributions and Recoveries towards Pension 55 2.8% 52 3.2%

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Share* Share* Components 2013-14 2014-15 (RE) (%) (%) and Other Retirement Benefits Miscellaneous General Services 1640 84.6% 1405 86.6% Of which State Lotteries 83 5% 84 6% Social Services 485 564

Education, Sports, Art and Culture 96 20% 170 30% Medical and Public Health 152 31% 156 28% Family Welfare 37 8% 0 0% Water Supply and Sanitation 36 7% 55 10% Housing 5 1% 0 0% Urban Development 128 26% 154 27% Information and Publicity 0 0% 0 0% Labour and Employment 11 2% 10 2% Social Security and Welfare 9 2% 7 1% Other Social Services 11 2% 11 2%

Economic Services 590 600

Crop Husbandry 21 4% 35 6% Animal Husbandry 16 3% 7 1% Dairy Development 0 0% 0 0% Fisheries 2 0% 2 0% Forestry and Wildlife 21 4% 51 9% Cooperation 3 1% 18 3% Other Agricultural Programme 40 7% 30 5% Other Rural Development Programme 77 13% 60 10% Major Irrigation 47 8% 30 5% Major and Medium Irrigation 19 3% 6 1% Minor Irrigation 0 0% 1 0% Village and Small Industries 0 0% 0 0% Industries 3 1% 0 0% Non-ferrous Mining and Metallurgical 44 7% 90 15% Industries Civil Aviation 1 0% 0 0% Roads and Bridges 0 0% 0 0% Road Transport 200 34% 177 30% Other Communication Services 0 0% 0 0% Tourism 0 0% 0 0% Civil Supplies 78 13% 92 15% Other General Economic Services 18 3% 1 0% Source: State Finance, RBI; Share calculated with respect to economic services, social services and economic services for respective items in that sectors

4.1.3 Inter-state Comparison

This section analyses the revenue of the general category states Andhra Pradesh collects highest own non-tax revenue followed by Uttar Pradesh, Rajasthan, Maharashtra and Madhya Pradesh. The state of Goa, West Bengal, Bihar, Punjab, Karnataka are the lowest in terms of own non-tax revenue collection.

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Table 3: State-wise Comparison of Revenues in crores (2013-14 RE)

Sl No. States T0tal Own Revenue Own Non-Tax Revenue GSDP (Nominal) 1 Andhra Pradesh 87838 15394 464184 2 Bihar 23074 1919 343663 3 Chhattisgarh 21459 5834 185682 4 Goa 5388 1783 48897 5 Gujarat 67321 7113 765638 6 Haryana 31655 5066 388917 7 Jharkhand 14496 4344 172773 8 Karnataka 65389 3859 582754 9 Kerala 41156 5613 396282 10 Madhya Pradesh 42068 8139 434730 11 Maharashtra 123098 12758 1476233 12 Orissa 24580 7475 272980 13 Punjab 27271 3191 317054 14 Rajasthan 47963 13510 517615 15 Tamil Nadu 91221 7857 854238 16 Uttar Pradesh 84425 15325 862746 17 West Bengal 40995 1895 706561 Source: GDP from CSO, State Finances: A Study of Budgets, RBI

Total own revenue is the sum of own non-tax revenue and own tax revenue. Own non-tax revenue contributed very less to the total own revenue as compared to own tax revenue. Goa with 33% contribution from non-tax revenue topped the general category states (GCS). Punjab with a mere contribution of 12% was ranked 12th. It is one of the low performing state in the Own Non tax revenue contribution in Figure 2.

Figure 2: Own Non-Tax Revenue as % of Total Own Revenue (2013 - 14 RE)

33% 35% 30% 30% 30% 27% 28% 25% 19% 18% 20% 18% 16% 14% 15% 11% 10% 12% 8% 9% 10% 6% 5% 5% 0%

Source: State Finance, RBI

Punjab’s own non-tax revenue share in non-tax revenue was 48% and ranked 6th among general category state. Punjab’s per capita own non-tax revenue was Rs. 1123, which was far below average total per capita own non- tax revenue. The average of total states per capita own non-tax revenue was Rs. 1866. Own non-tax revenue per lakh GSDP was Rs. 1007 for Punjab. It was ranked 10th on per capita ONTR and 11Th on per lakh GSDP share.

Table 4: State-wise Comparison of Own Non-tax Revenue (2013-14)

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ONTR/ Sl. Ra ONTR/ ONTR/ ONTR/ States Total Own Rank Rank Rank No. nk NTR Population lakh GSDP Revenue 1 Andhra Pradesh 18% 8 49% 5 1780 5 3316 2 2 Bihar 8% 15 10% 17 177 17 559 16 3 Chhattisgarh 27% 5 44% 9 2193 2 3142 3 4 Goa 33% 1 80% 1 12036 1 3646 1 5 Gujarat 11% 12 50% 3 1137 9 929 12 6 Haryana 16% 9 44% 8 1927 3 1303 10 7 Jharkhand 30% 3 33% 14 1266 8 2514 6 8 Karnataka 6% 16 21% 15 613 15 662 15 9 Kerala 14% 10 50% 4 1665 7 1417 9 Madhya 10 19% 6 34% 13 1080 12 1872 7 Pradesh 11 Maharashtra 10% 13 41% 10 1102 11 864 14 12 Orissa 30% 2 36% 12 1736 6 2738 4 13 Punjab 12% 11 48% 6 1123 10 1007 11 14 Rajasthan 28% 4 57% 2 1894 4 2610 5 15 Tamil Nadu 9% 14 46% 7 1058 13 920 13 16 Uttar Pradesh 18% 7 39% 11 740 14 1776 8 17 West Bengal 5% 17 11% 16 202 16 268 17 Source: GSDP from CSO, Population from Census, State Finances: A Study of Budgets, RBI

4.1.3.1 General services and components

Punjab performed well in general services and ranked second in general services share in ONTR. However the share has gradually declined over the period. The general services share in ONTR was 86% in FY 2009-10 and reduced to 61% in FY 2013-14 (RE). Per lakh share of general service in GSDP also reduced to Rs. 1007 in FY 2013-14 (RE) from Rs. 2476 in FY 2009-10.

Table 5: State-wise comparison of general services revenue

As % of ONTR General Service per lakh GSDP Sl. No. States 2013-14 Rank (2013- 2013-14 Rank (2013- 2009-10 2009-10 RE 14 RE) RE 14 RE) 1 Andhra Pradesh -5% 3% 15 -75 3316.27 2 2 Bihar 48% 35% 3 495 558.52 16 3 Chhattisgarh 4% 1% 17 137 3141.98 3 4 Goa 18% 9% 10 1055 3645.52 1 5 Gujarat 22% 7% 13 272 929.07 12 6 Haryana 10% 7% 11 122 1302.65 10 7 Jharkhand 9% 5% 14 258 2514.08 6 8 Karnataka 25% 16% 6 251 662.21 15 9 Kerala 54% 76% 1 433 1416.52 9 10 Madhya Pradesh 9% 7% 12 263 1872.21 7 11 Maharashtra 20% 12% 7 191 864.20 14 12 Orissa 6% 2% 16 112 2738.30 4 13 Punjab 86% 61% 2 2476 1006.61 11 14 Rajasthan 22% 9% 9 382 2610.08 5 15 Tamil Nadu 14% 9% 8 148 919.81 13 16 Uttar Pradesh 62% 23% 5 1621 1776.26 8 17 West Bengal 16% 27% 4 98 268.25 17 Total 28% 15% 429 1377.28 Source: CSO, State Finances: A Study of Budgets, RBI

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Since component-wise data for other states was not available further analysis could not be done.

4.1.3.2 Social services and components

State-wise comparison of social services with respect to ONTR and GSDP presented the position of Punjab in terms of its revenue share. The share of social services in ONTR has increased from 4% to 15% between FY 2009-10 and FY 2013-14 (RE). It was ranked 7th in the category. Per lakh share of social service in GSDP has also increased to Rs. 153 in FY 2013-14 (RE) from Rs. 113 in FY 2009-10.

Table 6: State-wise comparison of social services revenue

As % of ONTR Social Service per lakh GSDP Sl. States Rank (2013- 2013-14 Rank (2013- No. 2009-10 2013-14 RE 2009-10 14 RE) RE 14 RE) 1 Andhra Pradesh 3.5% 9.4% 11 57.202 312.1 6 2 Bihar 2.6% 2.9% 15 26.571 16.0 17 3 Chhattisgarh 1.4% 1.0% 17 44.342 32.6 15 4 Goa 6.5% 10.6% 10 387.29 386.4 5 5 Gujarat 9.0% 16.6% 6 113.15 154.0 7 6 Haryana 18.3% 36.5% 3 224.65 475.3 3 7 Jharkhand 3.6% 3.5% 14 108.66 87.5 13 8 Karnataka 7.2% 17.0% 5 70.684 112.5 11 9 Kerala 10.1% 6.2% 12 80.811 88.5 12 10 Madhya Pradesh 13.3% 33.9% 4 373.2 634.9 2 11 Maharashtra 12.9% 14.9% 8 125.77 128.6 10 12 Orissa 3.5% 1.9% 16 68.145 51.9 14 13 Punjab 4.0% 15.2% 7 113.11 153.1 8 14 Rajasthan 7.8% 5.0% 13 133.81 130.5 9 15 Tamil Nadu 26.3% 43.9% 1 276.08 403.4 4 16 Uttar Pradesh 19.3% 43.3% 2 500.91 768.5 1 17 West Bengal 7.9% 11.8% 9 48.373 31.8 16 Total 11% 18% 168 253

Source: GSDP from CSO, State Finances: A Study of Budgets, RBI

Major components of social services

Table 7 represents major components of social services for general category states in FY 2013-14 (RE). These five major components constituted almost 90% of the total social services for the states. Education Sports Art and Culture, Medical and Public Health, and Urban Development have contributed almost 78% percent in social sector for Punjab.

Table 7: State-wise percentage share of major components of social services in total social services

Education Urban Sl. Medical and Labour and Water Supply States Sports Art and Developm No. Public Health Employment and Sanitation Culture ent 1 Andhra Pradesh 84% 8% 1% 4% 1% 2 Bihar 14% 46% 0% 9% 8% 3 Chhattisgarh 9% 22% 7% 18% 12% 4 Goa 11% 5% 25% 3% 54% 5 Gujarat 39% 9% 6% 35% 0% 6 Haryana 25% 9% 60% 1% 2% 7 Jharkhand 23% 24% 0% 19% 11%

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Education Urban Sl. Medical and Labour and Water Supply States Sports Art and Developm No. Public Health Employment and Sanitation Culture ent 8 Karnataka 36% 36% 2% 6% 0% 9 Kerala 61% 31% 1% 4% 0% 10 Madhya Pradesh 93% 2% 1% 1% 0% 11 Maharashtra 19% 18% 32% 9% 1% 12 Orissa 12% 20% 3% 6% 44% 13 Punjab 20% 31% 26% 2% 7% 14 Rajasthan 13% 11% 1% 31% 42% 15 Tamil Nadu 50% 12% 30% 2% 0% 16 Uttar Pradesh 91% 2% 0% 1% 0% 17 West Bengal 19% 51% 13% 3% 5% Source: State Finances: A Study of Budgets, RBI

Education Sports Art and Culture, Medical and Public Health, and Urban Development could be selected for detailed analysis in social sector. These components were selected on the basis of their share in total social sector revenue.

4.1.3.3 Economic services and components

State-wise comparison of economic services with respect to ONTR and GSDP presented the position of Punjab in terms of its revenue share (Table 8). The share of economic services in ONTR has increased from 6% to 18% between FY 2009-10 and FY 2013-14 (RE). It was ranked 16th in the category.

Table 8: State-wise comparison of economic services

As % of ONTR Economic Service per lakh GSDP Rank Rank Sl. No. States 2009- 2013-14 2013-14 (2013-14 2009-10 (2013- 10 RE RE RE) 14 RE) 1 Andhra Pradesh 38.6% 30.8% 12 632 1020 6 2 Bihar 27.8% 44.6% 10 285 249 13 3 Chhattisgarh 86.8% 90.6% 1 2658 2847 2 4 Goa 74.9% 80.1% 4 4451 2921 1 5 Gujarat 60.4% 56.9% 6 764 529 8 6 Haryana 47.0% 34.6% 11 577 450 9 7 Jharkhand 78.8% 88.6% 2 2361 2227 4 8 Karnataka 55.1% 54.8% 7 544 363 12 9 Kerala 26.0% 13.0% 17 207 184 15 10 Madhya Pradesh 56.4% 51.3% 8 1583 960 7 11 Maharashtra 50.6% 48.1% 9 493 416 11 12 Orissa 71.2% 84.0% 3 1404 2300 3 13 Punjab 6.6% 18.5% 16 189 186 14 14 Rajasthan 43.1% 70.0% 5 739 1826 5 15 Tamil Nadu 22.8% 19.9% 14 239 183 16 16 Uttar Pradesh 13.7% 24.3% 13 357 431 10 17 West Bengal 61.1% 19.3% 15 373 52 17 Total 42% 47% 647 649

Source: GSDP from CSO, State Finance: A Study of Budgets, RBI

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Major components of economic services

Table 9 represents major components of economic services for the general category states for 2013-14 (RE). These nine major components constituted almost 99% of the total economic services for the states. The two major sectors, road transport and other economic services contributed 34% and 37% respectively towards total economic services for Punjab.

Table 9: State-wise percentage share of major components of economic services in total economic services

Other Major and Sl. Crop Animal Forestry Co- Agricultur Road Medium Indust Othe No States Husband Husban and oper al Transpo Irrigation ries rs . ry dry Wildlife ation Programm rt projects es Andhra 1 1% 0% 3% 1% 0% 6% 65% 0% 20% Pradesh 2 Bihar 1% 0% 2% 3% 0% 4% 76% 0% 13% 3 Chhattisgarh 0% 0% 9% 0% 0% 8% 71% 0% 1% 4 Goa 0% 0% 0% 0% 0% 1% 1% 0% 1% 5 Gujarat 1% 2% 1% 1% 0% 20% 52% 0% 7% 6 Haryana 0% 0% 2% 0% 0% 9% 9% 67% 12% 7 Jharkhand 0% 0% 0% 0% 0% 5% 91% 0% 2% 8 Karnataka 2% 0% 9% 3% 0% 1% 67% 0% 10% 9 Kerala 2% 1% 43% 12% 0% 5% 11% 0% 22% Madhya 10 1% 0% 26% 0% 0% 3% 55% 0% 0% Pradesh 11 Maharashtra 3% 1% 6% 3% 0% 12% 41% 0% 14% 12 Orissa 0% 0% 0% 0% 0% 6% 92% 0% 1% 13 Punjab 4% 3% 4% 1% 7% 3% 8% 34% 37% 14 Rajasthan 0% 0% 1% 0% 0% 1% 36% 0% 1% 15 Tamil Nadu 7% 1% 9% 1% 2% 2% 68% 0% 7% Uttar 16 1% 1% 10% 0% 0% 12% 27% 0% 17% Pradesh 17 West Bengal 2% 1% 34% 5% 0% 3% 11% 0% 36% Source: State Finances: A Study of Budgets, RBI

Road and transport and industries could be selected for detailed analysis in economic sector. These components were selected on the basis of their share in total economic sector revenue. 4.1.4 Detailed analysis of education sector

An in-depth analysis of the Education sector was conducted with an objective of revenue enhancement. Four Directorates function under the Punjab Education Department, namely the Directorate of Public Instruction (Colleges), Directorate of Secondary Education, Directorate of Primary Education and Directorate of State Council of Educational Research and Training (SCERT). The education sector assumes central importance in the Human Development of any state. As per the present policy of the state government, primary education is to be provided free of cost and similar policy is on the anvil in the upper primary or middle schools. Thus, for this sector, our focus on generation of Non-Tax Revenue from the education sector has been on Higher and Technical Education. The relevant tables, which would suggest the arguments below and provide detailed picture of the education sector are presented in annexure.

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4.1.4.1 Key observations and Recommendations

Table 10: Elementary education sector

Observations Area  No information was furnished by the concerned directorate for further analysis. We Revenue Issues have asked them for admission fees, tuition fees, source of revenue receipts, grant-in- [School level aid policy document, grant-in-aid balance sheet submitted by the schools etc. We have Analysis] met the Directorate staff on August 27, 2015.

 Lower revenue receipts of Punjab: Punjab elementary education revenue receipt Receipt was lower in comparison with other states. The reasons were as follows: o Punjab collects a meagre amount under elementary education head. In FY 2012-13, Punjab revenue receipts were only Rs. 2 crores. Of which the Punjab government has received Rs. 1.22 crore as tuition and other fees. Other states like Uttar Pradesh (UP), Andhra Pradesh (AP), Tamil Nadu and Haryana have received Rs. 3,808 crores, Rs. 930 crores, Rs. 229 crores and Rs. 309 crores respectively (Table 11). The detailed source of revenue was not available for other states. o Elementary education revenue receipts were higher in AP, MP and Haryana because they included salary of Sarva Shiksha Abhiyan’s (SSA) teachers into their elementary education revenue receipts whereas Punjab showed it as SSA society revenue. Punjab was receiving the money in a society head and hence it was not being reflected in State treasury.  Tamil Nadu case study: In Tamil Nadu, grant of approval needs to be taken for opening a new play school. The application fee to open a play school is Rs. 5,000. The approval granted is valid for three years after which the respective school shall have to apply for renewal. Annual affiliation continuance fee is Rs. 5,000/- in the case of renewal2. We have not come across any such provisions in Punjab.

Expenditure  Lower revenue expenditure in Punjab: Punjab elementary education revenue expenditure was lower in comparison with Haryana, AP, MP and UP.  In FY 2013-14, Punjab’s expenditure was Rs. 1624 crores, whereas AP, MP and UP had spent Rs. 7727 crores, Rs. 8595 crores and Rs. 19773 crores respectively. Haryana’s expenditure was Rs. 4391 in 2012-133.  Components of expenditure: The expenditure of other states were higher because they included various expenditure head in its finance account such as: o Punjab did not include CSS elementary expenditure in its finance account but it appeared in others states finance account. In FY 2013-14, CSS expenditure of AP, MP and UP was Rs. 356 crores, Rs. 1154 crores and Rs. 4012 crores respectively. Haryana’s CSS expenditure was Rs. 178 crores in FY 2012-13. o On the state’s plan expenditure side, Punjab included only government primary school and special component plan for scheduled castes, whereas Haryana included a number of expenditure such as direction and administration, government primary school, text book, scholarship, SSA, national program and special component plan for scheduled castes and others (Table 11). o On the non-plan side, the expenditures of the Punjab govt. included government primary schools, assistance to non-government primary schools and inspection. However, Haryana took into account direction and

2 Revised draft code of regulations for play schools, Government of Tamil Nadu, 2015 Available at: < http://www.tn.gov.in/schooleducation/draft_regulations/draft_regulations_playschool_revised_200715.pdf> 3 Haryana Finance Account data is not available for 2013-14.

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Observations Area administration, maintenance of buildings government primary schools, assistance to non-government primary schools and text books as its elementary education non-plan expenditure (Table 12). o Madhya Pradesh non-plan expenditure consisted of assistance to municipal corporation, assistance to municipal councils and assistance to Nagar panchayats/notified area committees or equivalent thereof which alone accounts for Rs. 2,136 crores. It also included tribal area sub plan.  Grant-in-Aid: The Directorate of Elementary Education gives grants-in-aid to the private aided schools. We were unable to conduct grant-in-aid analysis in this assessment as directorate was unable to provide the required data.  Recovery Rate: The recovery rate4 in elementary education in Punjab was very low and showing decreasing trend over the last five years. The recovery rate of Punjab has declined from Rs. 477 in FY 2009-10 to Rs. 82 in FY 2013-14. Haryana and Tamil Nadu recovery rate also have declined from Rs. 10,421 to Rs. 7,042 and Rs. 5,572 to Rs. 3,444 between FY 2019-10 to 2012-13 respectively. However Tamil Nadu recovery rate has gone up from Rs. 3,444 in FY 2012-13 to Rs. 11,318 in FY 2013-14. AP and UP were showing very high recovery rate. UP recovery rate showed a dip in FY 2010-11 and then increased to Rs. 41,625 and AP recovery rate has reached to Rs. 17,969 in FY 2013-14 from Rs. 183 in FY 2009-10 (Table 13). Incorporation of SSA’s salary in revenue receipts could be a reason of high recovery rates in other states.

 The government of Punjab can impose application fee/ processing fee/ inspection Recommendations charge/grant/renew of grant to run new/old private play schools.

Table 11: Elementary Education Revenue Receipts (in Rs. Lakh) States/Years 2009-10 2010-11 2011-12 2012-13 2013-14 Andhra Pradesh 615 14,529 60,528 93,039 138,864 Madhya Pradesh 119 9,727 - 12,141 - Punjab 383 197 433 245 134 Tamil Nadu 25,530 27,531 21,129 22,969 91,867 Uttar Pradesh 136,210 237,780 91,941 380,818 520,518 Haryana 26,512 246,96 272,49 309,22

Source: Finance Account, CAG

4 Recovery rate is defined as revenue receipts divided by revenue expenditure. It is calculated as revenue per lakh expenditure.

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Table 12: Component of Elementary Education Expenditure (in Rs. Lakh) Punjab Haryana* Andhra Pradesh Madhya Pradesh Uttar Pradesh

Head of Accounts 2013-14 2012-13 2013-14 2013-14 2013-14 Non- State CSS Non- State CSS Non- State CSS Non- State CSS Non- State CSS Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan 1 Direction and Administration - - - 3841 63 - - 72923 - 9465 - - 3316 - - 53 Maintenance of Buildings - - - 1132 ------153 - - 1042 2245 30837 3592 3631 4049 7999 101 Government Primary schools 48 6 - 2 31237 - 3 - - 82 1 6 2074 - - Assistance to Non-Government Primary 2776 1398 102 Schools 508 - - 1687 - - 0 - - 7994 - 1238 590 7354 - Assistance to local bodies for primary 5414 103 education ------61 ------1009 104 Inspection 1294 - - - - - 4 - - - - - 0 - - 105 Non-Formal Education ------102 - - - - - 794 - 106 Teachers and other services ------3 - - 107 Teachers Training ------2059 71 - - - - - 108 Text Books - - - 1291 5 - - - - - 6774 - - - - 109 Scholarships - - - - 9022 ------2580 2372 111 Sarva Shiksha Abhiyan - - - - 6 ------69 National Programme of Mid-Day Meals in 1785 9657 112 Schools - - - - 5346 2 ------110 - 2 1452 191 Assistance to Municipal Corporation ------23 - - - - - 6487 192 Assistance to Municipal Councils ------2 - - - - - Assistance to Nagar Panchayats/Notified 193 area committees or equivalent thereof ------3520 - - - - - Special Component Plan for Scheduled 2270 1523 5849 789 Castes - 33974 - - 19415 - - 4 4633 - 17928 5 - - 9 8452 1899 796 Tribal Area Sub Plan ------9365 1567 - 2 9 - - 952 Page 33 of 70 PwC TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Head of Accounts Punjab Haryana* Andhra Pradesh Madhya Pradesh Uttar Pradesh 1404 2602 2740 2901 12466 800 Other Expenditure - - - - 8 - 910 2 0 - 28 - 4 5 7909 911 Deduct Recoveries of overpayments ------36 ------1060 5642 3163 1049 1785 606 13111 3565 5943 1497 1154 1443 1328 401 Total 50 9 0 24 40 2 022 6 9 27 43 68 349 13 201 Source: Finance Account, CAG * Haryana’s latest finance account data is not available.

Table 13: Elementary Education Recovery Rate (in Rupees) States 2009-10 2010-11 2011-12 2012-13 2013-14 Andhra Pradesh 183 2757 9200 15093 17969 Madhya Pradesh 29 1779 0 1800 0 Punjab 477 212 363 153 82 Tamil Nadu 5572 4904 3351 3444 11318 Uttar Pradesh 13493 17806 5290 19102 41625 Haryana 10421 8390 8242 7042 Note: Recovery rate: Revenue receipts per lakh revenue expenditure. Source: Finance Account, CAG

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Table 14: Secondary education sector

Area Observations Revenue Issues  Punjab received very nominal fee from secondary schools. The fee structure is given in [School Level Table 15. The fee structure has not been revised for more than 45 years. We suggest Analysis] that the fee structure should be revised. State Level Issues Receipt  Lower Revenue Receipts for Punjab: In Punjab, secondary education revenue receipt was lower in comparison with other states5 (Table 16).  The reasons behind the lower revenue in Punjab are listed below: o Source of funds: Components of Punjab secondary education revenue receipts are tuition and other fees6, text book receipts and other receipts. Tuition and other fees contributed maximum and it was 75% of total receipts of secondary education in FY 2013-14 ( o Table 17). o Cause of higher receipts in other states: Some of the state’s secondary education revenue receipts were higher than that of Punjab. These states showed salary of Rashtriya Madhyamika Shiksha Abhiyan’s (RMSA) teachers into their secondary education revenue receipts. However Punjab showed it as RMSA society revenue. Punjab was receiving the money under a society head and hence it was not being reflected in State treasury. The states in comparison are AP and MP7. The revenue receipt of Punjab was Rs. 20 crores. However, AP, UP and Tamil Nadu received Rs. 295 crores, Rs. 135 crores and Rs. 656 crores respectively. o Increase in revenue receipts of Haryana from Rs 2 crores to Rs 53 crores between FY 2011-12 and FY 2012-13, was due to deposits of scholarships fund into secondary education revenue receipts. The directorate of secondary school education had directed banks to deposit the scholarship fund in the treasury.  Tamil Nadu case study: The State of Tamil Nadu collects revenues from secondary education under the following major heads:  Management contribution: This is a onetime payment and the school management pays the management contribution in the Government Account on the basis of number of students as follows: Up to 500 students: Rs. 10,000 501-750 students: Rs. 20,000 551- 1000 students: Rs. 40,000 1001-1500 students: Rs. 60,000 1501-2000 students: Rs. 80,000 Above 2000 students: Rs. 1,00,000  Inspection fees: It is an annual payment by the schools. An amount of Rs. 2,500 is collected for Matriculation schools and Rs. 5,000 for higher secondary schools  Application fees: It is paid every three years for renewal of recognition. An amount of Rs. 10,000 is paid for upgradation and renewal and Rs. 1,000 for opening additional classes.  Apart from these three heads the government also collects onetime endowment fees of Rs.10, 000

5 Haryana finance account data is available till FY 2012-13. Punjab secondary education revenue receipts were higher than that of Haryana in last 4 years except in FY 2012-13. 6 Tuition and other fees include Tuition Fee, Parent Teacher Association Fund Cultural Fund and Sports Fund. 7AP has mentioned in its finance account that it includes RMSA’ teacher salary and we have confirmed from our own source for MP. MP shows RMSA’s teacher salary in others of general education.

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Area Observations Expenditure  Punjab secondary education revenue expenditure: Punjab’s expenditure was higher than that of Haryana and MP in last five years.  Punjab’s secondary education revenue expenditure was Rs. 3,937 crores in 2012-13 whereas Haryana spent Rs. 1,385 crores in 2012-13 (Table 18). In 2013-14, Punjab expenditure was Rs. 4,000 crores, whereas MP expenditure was Rs. 3,345 crores. AP and UP spent Rs. 7,012 crores and Rs. 8,185 crores respectively.  The reason for Punjab’s higher expenditure in comparison with Haryana and MP and lower in comparison with AP and UP are listed below:  Components of expenditure: Punjab spent most on government schools under secondary education. In 2014-15, it was Rs. 3,636 crores (both plan and non-plan) which was highest among states under consideration and covers almost 90% of total Punjab secondary education expenditure (Table 18).  Punjab assistance to non-government secondary schools was Rs. 221 crores which was almost double of Haryana and triple of MP in 2012-13. Haryana and MP spent Rs.113 crores and Rs. 82 crores towards assistance to non-government secondary schools (Table 18).  Andhra Pradesh and Madhya Pradesh provided assistance to local bodies for secondary education which was Rs. 4,647 crores and Rs. 1,235 crores respectively.  Under the CSS scheme, Punjab showed expenditure related to teacher training only. However, other states showed revenue expenditure under several heads such as government secondary schools, assistance to non-government secondary schools, special component plan for scheduled castes & tribal area sub plan (Table 18).  Grant-in-Aid (Punjab): Grant-in-aid rule is very old and it has not been revised since 1967. The grant-in-aid rule includes only those schools which were added under grant- in-aid scheme in 1967.  The Directorate of secondary education sanctions financial assistance grants to the private aided schools to the extent of 95% of the deficit8 and provides 10% contribution towards the Provident Fund based on the Grant-in-Aid Rules.  The approved items of expenditure are (a) pay and allowances of the teaching, non- teaching staff and ministerial staff (sanctioned post only) and (b) contribution towards the Provident Fund (CPF) of the eligible employees.  The deficit financing pattern of secondary education has changed from year, 2015. Now, the Directorate of secondary education would be financing 70% of the deficit only.  There are 476 private aided secondary schools and total positions sanctioned including teaching and non-teaching staffs are 9,787.  Almost 50% of teaching and non-teaching posts are vacant. All the vacant posts would be filled by 2017. The total vacant posts are 4,445. The new recruited teacher’s salary and CPF would be taken into account from the next year and so the burden on the department would increase.  Grant-in-Aid (Haryana): The grant-in-aid policy of Haryana is same as that of Punjab. Haryana also sanctions 95% of deficit (pay and allowances of the teaching, non- teaching staff and ministerial staff after deducting tuition and admission fees) and 10% of CPF to the government aided schools.  Recovery rate: Punjab recovery rate was Rs. 516 whereas AP, UP and Tamil Nadu recovery rate were Rs. 3,701, Rs. 1,528 and Rs. 8,017 respectively. The recovery rate for different states are found to be widely divergent (Table 19).  The fee structure of government and aided schools has not been revised since 1967. There is a need to revise aided school fee structure. The revised fee structure would Recommendations reduce gap in deficit financing.  Categorize private school into non-commercial and commercial institutions.

8 The deficit is calculated using some specifics items. Secondary education calculates total expenditure (Salary and Provident Fund of Teaching and Ministerial Staff) less tuition fee.

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Area Observations Categorisation would lead to identify high income private schools. A number of fees can be imposed on the identified commercial schools, such as: o Application fee: Application fee can be charged for opening up of a new school, permission, recognition and renewal of recognition of school. Application fee can also be levied on upgradation and opening of additional classes. o Management contribution: One time management contribution fee can be charged to the commercial private schools on the basis of its size. The management contribution is nothing but the charge for the services like road, transport, police services etc., which the government provides. o Inspection fee: An annual inspection fee can be imposed on commercial private schools. The State Government may regulate education and monitor the performance of all recognised private schools. Every recognised private school should be inspected at least once in an academic year for monitoring its working under compliance9.  The Punjab government is recruiting new teachers, which would be an additional burden on the state finances. The new recruited teacher should be hired purely on contract basis for a specified period of time to reduce the burden. For instance, Director of Education, Delhi has engaged Trained Graduate Teacher (TGT) purely on contract basis10. Odisha government has also recruited contract based school teacher11.

Table 15: Secondary Education Fee Structure in Punjab (in Rupees) Particular 9th & 10th 11th & 12th Parent Teacher Fund 15 20 Sport Fund 10 12 Cultural Fund 5 8 Amalgamated Fund 240 300 Computer Fee 30 35 Tuition Fee (per month) 7 10 Additional Tuition fee (per month) 40 Source: Director of Public Instruction (Secondary Education), Punjab

Table 16: Secondary Education Revenue Receipts (in Rs. Lakh) States 2009-10 2010-11 2011-12 2012-13 2013-14

Andhra Pradesh 3,100 3,400 3,238 24,142 25,950 Madhya Pradesh 99 680 - 28 - Punjab 956 992 969 1,899 2,064 Tamil Nadu 7,753 15,964 18,550 38,563 65,624 Uttar Pradesh 26,438 9,286 9,217 34,131 13,518 Haryana 567 605 233 5310 - Source: Finance Account, CAG

9 Compliance activity can be developed by the department of secondary education. The compliance activities could be tuition and other fees charged by the private schools, addition of new classes or discontinuance of any class without the permission, maintain transparency regarding the account of school funds, deployment of teachers for non-teaching purpose etc. 10 http://edudel.nic.in/upload_2013_14/1110_11_dt_10062014.pdf 11 http://as1.ori.nic.in/rwss/MDM/ContractTeacher/Index.aspx

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Table 17: Components of Secondary Education Revenue Receipts (in Rs. Lakh) Budget Actual 2013- Sub Head Description Estimate Share 14 2013-14 Tuition and other fees 19.12 14.95 75% Text book receipts 0.18 0.24 1% Other receipts 2.50 4.74 24% Deduct – refunds 0.00 0.03 0% Total 19.96 100% Source: IFMS, Punjab

Table 18: Component of Secondary Education Revenue Expenditure (in Rs. Lakh) Head of Accounts Punjab 2013-14 Haryana ‘12-‘13 Andhra Pradesh ‘13-‘14 Madhya Pradesh ‘13-‘14 Uttar Pradesh ‘13-‘14 Minor Non- State CSS Non- State CSS Non- State CSS Non- State CSS Non- State CSS Description Head Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Direction and 001 4485 - - 3927 2902 - 19 - - 1213 284 - 3282 - - Administration 004 Research and training - - - 513 30 - 1902 1141 ------Maintenance of 053 - - - 1,074 205 ------Buildings 101 Inspection ------6,067 - - Teachers and other 104 ------1 - - services 105 Teachers Training 301 - 108 173 56 3,133 1,695 - - 1,131 100 423 - - - 106 Text Books ------31,349 ------107 Scholarships 68 397 - 13 4,260 - 13 - - - - - 65 - - 108 Examinations - - - - 10 - 6,631 - - - - - 15,417 - - Government Secondary 109 342,559 21,099 - 89,116 12,696 1,567 59,168 42,377 1 149,658 5,482 7,572 57,314 2 6,870 Schools Assistance to Non- 110 Government Secondary 22,138 - - 11,312 - - 46,027 360 - 8,205 - - 459,788 370 5,627 Schools

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Head of Accounts Punjab 2013-14 Haryana ‘12-‘13 Andhra Pradesh ‘13-‘14 Madhya Pradesh ‘13-‘14 Uttar Pradesh ‘13-‘14 Minor Non- State CSS Non- State CSS Non- State CSS Non- State CSS Non- State CSS Description Head Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Plan Assistance to Local 464,74 191 Bodies for Secondary ------123,500 - - - - - 0 Education Assistance to 192 Municipalities/ ------85 - - - - Municipal councils Special Component 124,83 789 Plan for Scheduled - 7,112 - - 7,592 - - 5,289 1,930 - 3,332 3,553 - - 9 Castes 796 Tribal Area Sub Plan ------1,363 633 - 25,053 4,593 - - - Irrecoverable Loans 792 ------written off 203,74 800 1,879 - - 2 - - - 13,667 23,017 - 351 - 935 173 Other Expenditure 9 Deduct Recoveries of 911 ------(76) ------overpayments 371,43 28,60 106,13 27,75 4,70 611,46 64,19 25,58 283,70 34,68 542,86 328,9 12,67 108 16,141 Total 1 9 0 0 1 9 7 2 7 8 9 60 0 400,148 138,581 701,247 334,535 884,499 Source: Finance Account, CAG * Haryana’s latest finance account data is not available.

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Table 19: Secondary Education Recovery Rate (in Rupees) States 2009-10 2010-11 2011-12 2012-13 2013-14 Andhra Pradesh 986 768 605 3768 3701 Madhya Pradesh 68 369 0 10 0 Punjab 433 376 279 482 516 Tamil Nadu 1767 3065 3012 5647 8017 Uttar Pradesh 5700 1613 1376 4617 1528 Haryana 358 329 126 3832 0 Note: Recovery rate: Revenue receipts per lakh revenue expenditure. Source: Finance Account, CAG

Table 20: Higher education sector Area Observations Revenue Issues  Colleges’ receipts: The government college collects Rs. 585 per semester under [Colleges Level different heads from each student (Table 21). Apart from this, college also collects Analysis] Rs. 5,025 per semester as university fees under different heads.  Total fees are higher than Haryana: The government colleges/aided colleges/universities collect around Rs.10, 000 to 12,000 per year per student for under graduate and post graduate courses in Punjab respectively. However the colleges affiliated in Haryana with Kurukshetra University (KUK), Maharshi Dayanand University and Chaudhary Devi Lal University (CDLU) collect around Rs. 4,500 only. Even though the government colleges and aided colleges in Punjab charge higher total fees than Haryana, they complain about shortage of funds to run their colleges.  The admission fees and tuition fees have not been revised since 30 years in Punjab as well as in Haryana. Expenditure  The Government colleges are fully funded while the aided colleges are not. However, Issues these aided colleges receive grants from government. The aided colleges are under the supervision of affiliated university and abide by the rules and regulation of the respective university. They cannot increase fee or charge additional fee from students to meet their expenditure. The fee structure is set by the university. Miscellaneous  The private aided colleges prepare 3 different balance sheets, one for the DPI Colleges, Issues One for UGC and one for their own sake. State Level Issues Revenue Receipt  Revenue from colleges: The components of revenue from higher education are admission fees, tuition fees and higher education fund. These fees come from the government Colleges only.  Govt. share is lower in total fees: Students are paying much higher total fees in Punjab than that of Haryana. But, Punjab government of Punjab charges only Rs. 144 and Rs. 180 as tuition fees for under graduate and post graduate courses respectively. However, Haryana charges Rs.360 as under graduate tuition fee and Rs. 420 as post graduate fee.  Admission fee is Rs. 10 for both under graduate and post graduate courses in Punjab as well as in Haryana.  The admission fees and tuition fees have not been revised for 30 years in both Punjab as well as in Haryana.  Difference in government aided college Fees: In case of higher education, the government aided colleges charge much higher admission fees and tuition fees than government colleges (Table 23).  The admission fee and tuition fee are different for different universities in Punjab. However, in Haryana the admission and tuition fees are similar in all three

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Area Observations universities. The admission and tuition fees of the government aided colleges affiliated to Guru Nanak Dev University (GNDU) and Punjabi University are very low in comparison with Punjab University. The admission and tuition fees of each university is given below: o Punjab University’s admission fee is Rs. 167 whereas GNDU and Punjabi University charge Rs. 15 and Rs. 50 respectively. o Similarly, Punjab University tuition fee is Rs. 756 whereas GNDU and Punjabi University tuition fees are Rs. 300 and Rs. 450 respectively.  Madhya Pradesh Case Study: Opening up a new private college of higher education yields revenues to the department. Each new private college has to pay Rs. 2 lakhs to the government. Before 2005, no charge was levied for opening up private institutes.  Private colleges are also charged Rs. 20,000 for opening up each new department. As per the guidelines these charges can only be revised once every three years. Scope for an increase in fees is therefore very limited in the next two years.  Processing/Inspection Fees (Haryana & Punjab): The department of higher education of Punjab charges only Rs. 5,000 as processing fee for issuing NOC for self- financing Law and B. Ed. College. While Haryana’s department of higher education charges Rs. 10,000 for issuing NOC to self-financing B.Ed. College and a sum of Rs. 2 lacs for self-financing Law College. Expenditure  Lower education expenditure in Punjab: On the expenditure side, Punjab was at the bottom in comparison with AP, MP, UP, Haryana and Tamil Nadu.  Major portion of expenditure of all states includes assistance to universities, expenditure of government colleges and institutes and assistance to non-government colleges and institutes.  In 2014-15, Punjab’s total expenditure on university and higher education was Rs. 503 crores of which financial assistance grants to universities and non-government colleges were Rs. 318 crores. However, AP, UP and MP’s total expenditure were Rs. 2,432 crores, Rs 2,815 crores, and Rs. 1,137 crores respectively. Of which AP, UP and MP spent Rs. 1,443 crores Rs. 1,315 crores and Rs. 1,009 crores respectively on grants to universities and Non-government College (Table 24).  Components of Expenditure: Total expenditure of Punjab includes assistance to universities, government colleges and institutes and assistance to non-government colleges and institutes and other expenditure. However other states include a number of different expenditures as well. These include faculty development programme, scholarships and special component plan for scheduled castes & tribal area sub plan, etc. (Table 24).  Grant-in-Aid (Punjab): The department of higher education sanctions financial assistance grants to the private aided colleges to the extent of 95% of the deficit and provides 10% Contribution towards the Provident Fund (CPF) based on the Grant-in- Aid Rules. The deficit calculated on the basis of income and expenditure of the colleges specified in the grant-in-aid rules.  The income of the colleges include admission fee, tuition fee (Received directly or through reimbursement), late admission fee, late payment fine, fines recovered from students, grant in aid received by the college under the UGC salary scheme or under any other scheme from the Govt. or the UGC for payment and salary and allowances of the teaching and non-teaching staff.  The approved item of expenditure is (a) pay and allowances of the teaching and non- teaching staff (sanctioned post only) and (b) contribution towards the Provident Fund of the eligible employees.  The government is providing lump sum grants of financial assistance to the Universities.

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Area Observations  The government is following very old grant-in-aid rules. It has not been revised since 1979.  In general, the Deputy Controller of Finance Account (DCFA), Higher Education follows previous documents rather than grant-in-aid rules.  As per our discussion with DCFA, Higher Education, in some instances, teachers go on leave without pay but the colleges claim their salary.  The department only verifies the document submitted by the college.  The department has also paid gratuity, leave encashment which are not mentioned in grant-in-aid rules.  The government aided colleges are also demanding pension and 10% of DA as contribution towards provident fund.  The government has sanctioned additional amount of Rs. 53 crores, of which Rs. 27 crores went to the Punjabi University and Rs. 26 crores to the Guru Nanak Dev University.  The government aided colleges do not show income from all sources. They exclude income from self-financed courses, funds received from UGC etc. The revenue from these courses is used to fund recurring expenditure of the colleges.  The government aided colleges are advised to take Rs. 1,800 per student as Retirement Benefit Fund if they give retirement benefits to their staff.  More than 50% of teaching/non-teaching sanctioned staff seats are vacant. The government colleges’ private aided colleges’ are filling these posts on contract basis. The expenditure of the government will increase in coming years as it has to provide salaries of teaching and non-teaching staffs of the aided colleges.  Grant-in-aid (Haryana): Haryana government also gives grant-in-aid and follow the same process as that of Punjab.  Haryana government is giving pension to aided colleges employees who have retired between 1998 and 2005. The government has kept both CPF (CPF from Department of Higher Education and College Management).  Recovery rate: Punjab’s recovery rate in university and higher education has declined in last four years from Rs. 1,108 in FY 2009-10 to Rs. 371 in FY 2012-13 and increased to Rs. 730 in 2013-14. The trend is similar for UP and Tamil Nadu. UP’s recovery rate has declined from Rs. 4,244 in FY 2009-10 to 1,393 in FY 2013-14. It is higher than the recovery rates of other states under consideration except UP. In FY 2013-14, recovery rate of AP, MP, and Tamil Nadu were Rs. 240, Rs. 376, and Rs. 369 respectively. Haryana’s recovery rate was Rs. 256 in FY 2013-14 (Table 25). Recommendations  Maintaining of lower fees is not sustainable; in fact, it is regressive since it often tends to benefit the better-off students. With growing prosperity, rising household incomes and strong family values, more and more households are now willing to pay higher fees. State Governments should raise fees to reasonable and sustainable levels in State universities and colleges. It is also supported by 12th Five year Plan12.  The fee structure of government colleges needs to be revised as it has not been revised for almost 30 years. Increase in fee can be based on Inflation/Per-capita Income. It should also be revised regularly or at-least every three years. A 10% hike every two or three years will help universities get some extra funds.  Government Aided Colleges: The fee structure (at least admission fee and tuition fee) of government aided colleges affiliated with Punjabi University and GNDU should

12 The idea of hiking fees has been supported by the Planning Commission in the 12th plan document, which has been approved by the National Development Council represented by all chief ministers, available at http://planningcommission.gov.in/plans/planrel/12thplan/pdf/12fyp_vol3.pdf

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Area Observations be in line with Punjab University. Punjabi University and GNDU charge much lower admission and tuition fees than the Punjab University.  The aided colleges total income (income from self-finance course, other charges imposed on students, renting out properties of college, grant received from UGC and other sources, etc.) and total expenditure should reflect in the balance sheet which they submit to the higher education department.  The government aided colleges collect Retirement Benefit Fund if it gives retirement benefits to its staffs. If it collects it from students they should not claim the same from government.  The new hired teacher should be on contractual basis for the short span of time to reduce the additional burden on government.  The private colleges should be categorised into commercial and non-commercial colleges. An annual fee like management fee can be imposed depending on the strength of students.  New private colleges can yield revenue to the government. A reasonable inspection fee/management fee/adding extra course fee can be imposed. Fees should be revised every three years.  The department should revise its processing fee for College of Education/ Law. The department of higher education charges only Rs. 5,000 as processing fee for a new college of Education/ Law in Punjab. It has been the same for a long time. It needs revision.  External Funding: Institutions should be encouraged to mobilise resources through alternative sources so that student fees do not form the only source of revenue. It should be encouraged to seek funding from diverse stakeholders through external contracts/grants for research, consulting and/or training projects. Individual and corporate donations have been a significant source of revenue for educational institutions, a practice that should be encouraged and incentivised by the government. The government should set up empowered committees to devise and execute strategies to tap funds from individuals and corporates.  Transparency: Increase transparency in both public and private institutions by requiring them to disclose important standardised information related to admissions, fees, faculties, programs, placements, governance, finance, business tie-ups and ownership.

Table 21: Fees Structure of Government College, Punjabi University (in Rs.) Share University and Higher Sl. No. Fee Red Education Government College/Univ. DPI Cross 1 Tuitions Fee 144 144 0 0

2 Admission Fee 10 10 0 0

3 Physical Education Fund 75 0 75 0

4 Building Fund 15 1 0

5 Student Aid Fund 15 0 0 15

6 Higher education Fund 10 10 0 0

7 Red Cross Fund 24 0 18 0 6 8 Amalgamated fund 96 0 96 0

9 Parent Teacher Fund* 1500 0 1500 0

10 Security Fund (Refundable) 50 0 50 0

11 Magazine Fund 25 0 25 0

12 Health Fund 10 0 10 0

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Share University and Higher Sl. No. Fee Red Education Government College/Univ. DPI Cross 13 Dilapidation Fund 6 0 6 0

14 Identity Card 8 0 8 0

15 Examination Fee 30 0 30 0

Source: Directorate of Public Instruction (Colleges), Punjab

Table 22: Fee Structure of Govt. College Mohali, Punjabi University (Semester) Fee Structure B.A B.Sc. B.Com M.A College Charges 585 585 585 585 University Charges 5025 5025 5025 4475 Government Charges 154 154 154 190 Total Charge 5764 5764 5764 5250 Government Share 3% 3% 3% 4% Source: Government College, Mohali

Table 23: Fees structure of government aided college affiliated to Punjab University (in Rs.) Punjab University Sl. No. Particular B. Com/ M. B. Sc./ B.A./M.A. Com M. Sc. 1 Admission Fee 165/165 165/165 165/165 2 Tuition Fee 756/840 756/1248 756/840 3 Retirement Benefit fund 1800/1800 1800/1800 1800/1800 4 Library Development Fund 265/265 265/265 265/265 Students scholarship Fund(Meritorious Cum mean 5 190/190 190/190 190/190 students) 6 College sports fund 315/315 315/315 315/315 7 Library Security(Refundable) 220/220 220/220 220/220 8 College Youth Welfare Fund 115/115 115/116 115/116 9 Prize distribution Functions 105/105 105/105 105/105 10 Seminar/Club/Societies 105/105 105/105 105/105 11 College News & Annual report 55/55 55/55 55/55 12 Identity/Library Card 55/55 55/55 55/55 13 Magazine Charges 160/160 160/160 160/160 14 Medical Charges 105/105 105/105 105/105 15 Environment Education Fees 250/0 250/0 250/0 16 Student Aid Fund(Poor & Needy) 315/315 315/315 315/315 17 Amalgamated Fund 1575/1575 1575/1575 1575/1575 18 Lab Charges Rs.100 p.m. / / 1260/1260 Total 6551/6385 6551/6794 7811/7646 University Charges 415/415 415/415 415/415 College running and maintenance charges 3534/7900 11034/10791 3534/7689 Grand Total 10500/14700 18000/18000 11760/15750 Source: Punjab University

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Table 24: Component of University and Higher Education Revenue Expenditure (in Rs. Lakh) Head of Accounts Punjab 2013-14 Haryana ‘12-‘13 Andhra Pradesh ‘13-‘14 Madhya Pradesh ‘13-‘14 Uttar Pradesh ‘13-‘14 Minor Non- State CSS Non- State CSS State CSS Non- State CSS State Description Head Plan Plan Plan Plan Plan Plan Non-Plan Plan Plan Plan Plan Plan Non-Plan Plan CSS Plan Direction and 1 Administrator 5 - - 3,504 799 - 1,913 30 25 1,278 143 552 961 - - 3 Training ------2 ------

102 Assistance to Universities 10,150 2,787 - 3,930 7,220 - 69,536 350 451 4,196 1,096 - 11,682 414 - Government Colleges and 103 Institutes 13,780 70 - 21,915 4,299 - 86,946 9,417 - 95,849 2,208 139 16,846 111 - Assistance to Non- 104 Government Colleges and Institutes 18,899 - - 34,774 - - 73,998 7 - 4,723 80 - 117,972 1,465 - Faculty Development 105 Programme - - - - 677 ------106 Text Books Development ------95 - - 40 - - - - - 107 Scholarships - - - 53 123 - - 14 - 17 678 - - - - Institutes of higher 112 learning ------127 ------Special Component Plan 789 for Scheduled Castes - - - - 5,174 - - - - - 1,827 - - - -

796 Tribal Area Sub Plan ------285 - - 879 - - - - 800 Other Expenditure 4,647 ------69,056 19 - Deduct Recoveries of 911 overpayments ------(3) (1) ------Deduct Recoveries of 912 unspent balances ------(0) ------106,10 Total 47,481 2,857 - 64,177 18,291 - 232,614 10,103 476 3 6,911 690 216,517 2,009 - 50,338 82,468 243,193 113,704 218,526 Source: Finance Account, CAG * Haryana’s latest finance account data is not available.

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Table 25: University and Higher Education Recovery Rate (in Rupees) States 2009-10 2010-11 2011-12 2012-13 2013-14 Andhra Pradesh 371 256 382 254 240 Madhya Pradesh 503 597 0 579 376 Punjab 1108 1330 954 371 730 Tamil Nadu 359 219 206 202 369 Uttar Pradesh 4244 2151 1283 890 1393 Haryana 316 550 496 256 0 Note: Recovery rate: Revenue receipts per lakh revenue expenditure. Source: Finance Account, CAG

Table 26: Technical education sector

Area Observations Revenue Issues  The total fee of government industrial training institutes (ITIs) is only Rs. 3,400 per [Technical annum. Education  The ITI department has revised total fee in 2014 for private unaided industrial Analysis] training centres/institutes. The total fees for engineering and non-engineering trade are Rs. 15,960 and Rs. 10,640 respectively. The fees will increase in three phases - in first phase, the fee will increase by 33% and then by 10% in the next two consecutive years (Table 27)  The polytechnic colleges collect a sum of Rs. 18,150 in terms of total fees. The fee structure is same in both government and private polytechnic institutes. Miscellaneous  The polytechnic institutes which are receiving grant-in-aid are ready to manage Issues themselves. Polytechnic institutes have requested polytechnic department to make them independent.  The government polytechnic institutes are not able to fill total available seats. It is reported that almost 50% of the total seats are vacant (Table 28). State Level Issues Revenue Receipt  The directorate of technical education regulates engineering, polytechnic education and ITIs. The department does not collect any fee from engineering colleges and also does not provide any support to them. Engineering colleges are autonomous.  The revenue receipts of Punjab were Rs. 3,398 crores, whereas, AP, UP and Tamil Nadu’s receipts were Rs. 1,199 crores, Rs. 19,001 crores and Rs. 12,620 crores respectively. Haryana’s revenue receipts were Rs. 1,628 in FY 2012-13.  The polytechnic education department receives revenue in the form of tuition fees and other fees from the government polytechnic institutes. Expenditure  Total technical education expenditure of Punjab was around Rs. 100 Crores. Out of which, 69 crores spent on Polytechnic College, 5 crore on administrations and direction and 26 crores was reimbursed to the transport department for concession of bus passes ( Table 29).  Technical education expenditure was quite higher in other states. In FY 2013-14, AP, MP, UP, and Tamil Nadu’s expenditure were Rs. 870 crores, Rs. 227 crores, Rs. 189 crores and Rs. 1,012 crores respectively. Other states expenditure includes many components such as assistance to universities for technical education, assistance to non-government technical colleges and institutions, engineering/technical colleges and institutes, which are not listed in Punjab finance account ( Table 29).  The department of polytechnic education sanctions grants of financial assistance to the private aided colleges to the extent of 95% of the deficit and provides 10% Contribution towards the Provident Fund based on the Grant-in-Aid Rules.  The items of expenditure are (a) pay and allowances of the teaching and non-teaching

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Area Observations staffs (sanctioned post only) and (b) contribution towards the Provident Fund of the eligible employees.  The department considers only tuition fees and fine as income of the polytechnic institutes. There are only 4 private aided polytechnic institutes in Punjab.  The ITI department conducts examination and admission for government, private aided as well as private institutes and does not charge private aided and unaided institutes for that  Department of ITI has paid Rs. 24.82 lakhs to NIC for conducting the online counselling for government, private aided and private colleges. Out of which, around 17 lacs were spent on private institutes.  The department finances 65% of total deficit13 to the government aided institute except Junior Technical institute (JTS), Jalandhar which gets 100% of deficit from the government.  The private unaided institutes get all the facilities as government institutes from the ITI department. However the ITI department does not collect any service charge from private unaided institutes.  Total financial assistance to 5 private aided institutes is around 1 crore, of which JTS alone receives around 80 t0 90 lacs.  Recovery rate: Recovery rate trend of technical education is quite similar to university and higher education recovery rate in Punjab. It has increased from Rs. 23,404 to Rs. 33,951 between FY 2009-10 t0 FY 2013-14. It was lower than UP but higher than other states under consideration (Table 30). Recommendations  The engineering colleges are autonomous and are running itself without getting any fund from the department of technical education. Autonomy has increased competition, which leads to attract more students. The aided polytechnic institutes can also be made autonomous so that these institutes can run themselves. It would save around Rs. 8 crores which the Punjab government is giving in terms of grant-in- aid.  The fee structure is almost same in both private and government polytechnic institutes. Nowadays private polytechnic institutes are attracting more students than government. Government polytechnic institutes should come up with new ideas to fill vacant seats. For instance, advertising, lowering cut off marks or publishing list of names till the seats are vacant. Increase in number of students will ultimately increase the revenue.  The Department of ITI is providing services like conducting entrance exams, counselling and admission to the private ITIs. The private ITIs should be charged on the basis of services provided by the department.

Table 27: Tuition fees of Industrial Training Institutes (ITI) Trades Old Fees (in Rs.) Enhanced Fees (Rs.) Remarks From session Feb 2014 Engg. Trades 12000 15960 33% increase Non-engg. Trades 8000 10640 From session Feb 2015 Engg. Trades 15960 17556 10% increase Non-engg. Trades 10640 11704 From session Feb 2016

13 The deficit of government aided industrial training institution is total expenditure (salary and recurring expenditure) minus tuition and admission fees and fines.

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Trades Old Fees (in Rs.) Enhanced Fees (Rs.) Remarks Engg. Trades 17556 19312 10% increase Non-engg. Trades 11704 12875 Source: Department of Technical Education and Industrial Training, Punjab

Table 28: Total Number of Polytechnic Institutes and Total Seat Filled Seat Sanctioned Year Total Seats Filled %age of Filled Seats Govt. Institute Pvt. Institute Total 2012-13 5105 53820 58925 32448 55% 2013-14 5465 58670 64135 33178 52% 2014-15 5105 59140 64245 35697 56% Source: Department of Technical Education, Punjab

Table 29: Components of Technical Education Expenditure (in Rs. Lakh) Andhra Madhya Haryana 2012- Uttar Pradesh Head of Accounts Punjab 2013-14 Pradesh Pradesh 13 2013-14 2013-14 2013-14 CS Stat Stat Stat CSS Stat Stat CSS Minor Non- CSS Non- CSS Non- Non- S Non- Description e e e Pla e e Pla Head Plan Plan Plan Plan Plan Plan Pla Plan Plan Plan Plan n Plan Plan n n Direction and 1 528 - - 426 146 - 813 - - 703 182 - 995 - - Administration 3 Training ------1 ------Assistance to 3,50 40,23 102 Universities for - - - - - 8,197 ------0 8 Technical Education 103 Technical Schools ------1 - - Assistance to Non- Government 104 - - - 2,227 200 - 137 50 - 3,928 2,491 - 2,172 - - Technical Colleges and Institutions 10,92 26,58 2,39 105 Polytechnics 6,505 381 - 4,681 963 6,548 9,741 212 31 11,246 614 - 6 0 8 107 Scholarships - - - 115 - - 22 - - 1 - - - - - Engineering/Techni 112 cal Colleges and - - - 1,086 4,572 - 156 - - 3,161 541 - 2,502 408 - Institutes Special Component 789 Plan for Scheduled - - - - 50 - - 825 508 - 660 24 - - - Castes 796 Tribal area sub plan ------389 238 - 719 8 - - - 800 Other Expenditure 2,595 - - 2 - - - - - 96 271 - 694 - - Source: Finance Account, CAG; * Haryana’s latest finance account data is not available

Table 30: Technical Education Recovery Rate (in Rupees) States 2009-10 2010-11 2011-12 2012-13 2013-14 Andhra Pradesh 1030 7577 2582 1374 1377 Madhya Pradesh 664 796 222 137 0 Punjab 23404 18765 17625 9610 33951 Tamil Nadu 17134 13356 9933 1255 12462 Uttar Pradesh 18748 37138 61755 18816 101993 Haryana 5824 6832 5784 5635 0 Note: Recovery rate: Revenue receipts per lakh revenue expenditure; Source: Finance Account

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

4.2 Debt Analysis On request of the Finance Department, GoP, the TA consultants conducted a study on the debt profile of the state. Objective of the study was to assess the loan repayment burden in coming years and the amount of benefit, state can have if they pre-pay the high cost loan. The historical figure of the loan data was provided IFMS. The analysis and results were discussed in detail with the special secretary finance and the report was submitted to the finance department on May 01, 2015.

The report as submitted to the Finance Department is produced below. 4.2.1 Introduction

As per State-wise Debt position stated by Reserve Bank of India (RBI) in its publication ‘State Finances – A Study of Budgets of FY 2013-14’ in January, 2014 – Punjab was only second to West Bengal in terms of Debt to GDP ratio in the year FY 2013-14 among the non-special category states. As per 14th Finance Commission report, Punjab’s rank amongst 27 states in Debt/GSDP in FY 2014-15 (BE) was 9. However, except West Bengal and Punjab – all other states are erstwhile Special Category States. Punjab’s debt/GSDP ratio stands at 30.1% in FY 2014-15 (RE) and expected to remain around 30% in 2015-16. If one takes the historical average of past 10 years (i.e., 2005-06 to 2014-05), the debt/GSDP ratio stands at 33.4%. Debt to GSDP ratio which was 46.4% in FY 2004-05 has come down to 30.1% reflecting the commitment of the states to control high growth in debt.

13th Finance commission had recognized three states as high debt category states i.e., Kerala, Punjab and West Bengal. However, Punjab has not received any non-plan revenue deficit grant under the 13th Finance commission or revenue deficit grant under 14th Finance commission aggravating the state fiscal situation further.

Debt accumulation in Punjab is a historical phenomenon. The economic activity suffered a lot during the war years (80s and 90s) and in the ensuing years. The state had to incur huge developmental expenditure to bring back the economy into track. However, the legacy debt burden continues and more so indirectly by the lost economic opportunity.

The interest rate environment has changed in the country. The Repo rate of RBI was at 8.5% level during April, 2012. It has come down over a period and now stands at 7.5%. Similarly, 10 year Government Securities average yield in April, 2012 was 8.6% which has come down to 7.8% in April, 2015. Inflationary environment has improved significantly over the years. RBI stated in the First Bi-Monthly monetary policy Statement, 2015-16 that:

“The Monetary Policy Framework Agreement signed by the Government of India and the Reserve Bank in February 2015 will shape the stance of monetary policy in 2015-16 and succeeding years. The Reserve Bank will stay focussed on ensuring that the economy disinflates gradually and durably, with CPI inflation targeted at 6 per cent by January 2016 and at 4 per cent by the end of FY 2017-18. Although the target for end of FY 2017-18 and thereafter is defined in terms of a tolerance band of +/- 2 per cent around the mid-point, it will be the Reserve Bank’s endeavour to keep inflation at or close to this mid-point, with the extended period provided for achieving the mid-point mitigating potentially adverse effects on the economy.” (Governor’s Note, Paragraph 14, dated 07th of April, 2015)

Therefore, our assessment is that – interest rate environment would remain benign for a prolonged period. The share of market loan in the overall loan portfolio of Punjab in FY 2014-15 was 75% and the average of past 5 years was 76.5%. Punjab has in the past taken several market loans at a high rate of interest (i.e., 9% or above). Given the higher share of market loan in the overall loan portfolio of Punjab, it puts enormous pressure in terms of debt servicing.

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

In the past, during FY 2012-13, Govt. of Mizoram pre-maturely retired high cost loan under Mizoram Public Resource Management Program (MPRMP) as the debt servicing burden was high in the state. Hence, this request should not be viewed in isolation.

“Interest Payments for FY 2012-13 is budgeted at Rs. 242.00crore which is a decrease of 10.78 per cent over the Budget Estimates of FY 2011-12. This is a sign of significant improvement in the State finances. The reason could be attributed to Prepayment of high cost loans under Mizoram Public Resource Management Program (MPRMP).” [Para 36, Budget Speech, Finance Minister, 2012-13, Mizoram]

4.2.2 Market Loan Analysis

Market loan, which were taken at rate of interest of 9% or more are considered to be high cost in the present scenario. Table 31 shows year-wise high cost loan amount and their corresponding principal outstanding and interest amount. Outstanding high cost loan amount was Rs. 12,650 crores as on April, 2015. These loans were mostly accumulated in the period of FY 2011-12 to FY 2014-15. The total outstanding principal amount was Rs. 59,000 crores. High cost loan was more than 20% of the total outstanding market loan. Interest has to be paid depending upon the rate of interest for different loans. For these high cost market loan the corresponding interest to be paid was Rs. 9,047 crores as on April, 2015.

Table 31: High Cost Market Loan Structure (Interest rate >= 9% per annum) as on April, 2015

Financial Loan Amount Principal Outstanding Interest to be paid* Total amount to be Year (in Rs Crore) amount* (in Rs Crore) (in Rs Crore) paid (in Rs Crore) 2008-09 1500 1500 497 1997 2011-12 750 750 484 1234 2012-13 1800 1800 1249 3049 2013-14 5400 5400 4530 9930 2014-15 3200 3200 2288 5488 Total 12650 12650 9047 21697 Note: * Principal outstanding amount and Interest to be paid are against the loan taken in that year

For the next 10 years, the outstanding principal and interest to be paid by the state government are calculated in the below table. All the loans realized till date have to be paid as per their repayment schedule. The total principal outstanding is Rs. 59,067 crores and the interest to be paid is Rs. 32,435 crores. The Financial Years 2019-20, 2021-22, 2022-23 and 2023-24 are witnessing a huge principal payment burden. The exchequer has to burn more than Rs 8,000 crores in these years towards principal payment for the loans taken before. However, the interest due is continuously declining over the years.

Table 32: Year-wise Principal and Interest payment schedule (in Rs. Crore) as on April 2015

Financial Year Principal Outstanding Interest to be paid Total Amount to be paid 2015-16 1665 4986 6651 2016-17 1456 4897 6353 2017-18 4121 4743 8864 2018-19 5061 4373 9434 2019-20 8185 3831 12016 2020-21 5128 3271 8399 2021-22 8200 2742 10942 2022-23 9700 1967 11667 2023-24 9000 1150 10150 2024-25 5550 435 5985 2025-26 1000 40 1040

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Financial Year Principal Outstanding Interest to be paid Total Amount to be paid Total 59,067 32,435 91,501

Table 33: Historical debt profile of Punjab

Year Debt as % of GSDP $ Interest Payments as % of Debt as % of Revenue Revenue Receipts Receipts 2000-01 37.27 24.99 296.79 2001-02 40.82 35.59 363.95 2002-03 44.81 31.02 332.88 2003-04 45.97 30.58 341.15 2004-05 46.45 28.84 325.78 2005-06 44.96 21.90 287.85 2006-07 38.03 24.72 287.85 2007-08 34.76 23.53 275.10 2008-09 33.20 23.66 278.99 2009-10 32.12 22.62 286.30 2010-11 30.77 19.98 252.07 2011-12 30.10 23.94 294.11 2012-13 30.08 21.31 267.62 2013-14 29.98 22.28 271.19 2014-15 RE 30.09 20.78 246.25 2015-16 BE 29.51 21.42 254.59 Note: $ Total outstanding debt including GPF

Table 34: Year-wise break-up of market loan of Punjab

Loan Taken Weighted Number Loan Amount Principal Interest Total amount (Financial Avg. of Loans (in Rs. Crore) Outstanding to be paid to be paid Year) interest amount (in Rs. Crore) (in Rs. Crore) rate (%) (in Rs. Crore) 1991-92 11.81 2 41 0 0 0 2001-02 9.59 4 419 0 0 0 2002-03 7.14 5 1141 0 0 0 2003-04 6.78 7 2292 320 37 357 2004-05 6.29 5 1831 219 31 251 2005-06 7.34 3 1601 1601 105 1706 2006-07 8.00 3 981 981 140 1121 2007-08 8.22 6 4121 4121 954 5075 2008-09 8.04 9 5061 5061 1536 6597 2009-10 7.93 11 4785 4785 1769 6554 2010-11 8.43 13 5128 5128 2488 7616 2011-12 8.68 21 8200 8200 4777 12977 2012-13 8.90 17 9700 9700 6642 16342 2013-14 8.93 16 9000 9000 7016 16016 2014-15 8.80 18 8950 8950 6135 15085 2015-16 8.05 1 1000 1000 805 1805 Total 141 64251 59067 32435 91501

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Table 35: Interest rate-wise break-up of market loan of Punjab (in Rs. Crores)

Rate of Numb Loan Loan Principal Principal Interes Interest Total Total Interest er of Amoun Amoun Outstand Outstand t to be to be paid amount amount (ROI, %) Loans t t ing ing paid (share) to be paid to be (share) amount amount paid (share) (share) A B C D=B+C ROI < 8 34 13983 21.8% 9832 16.6% 2936 9.1% 12767 14.0% 8.25> ROI >=8 18 7850 12.2% 7813 13.2% 4330 13.4% 12143 13.3% 8.50> ROI 18 8232 12.8% 8180 13.8% 3499 10.8% 11679 12.8% >=8.25 8.75> ROI 23 9965 15.5% 9392 15.9% 5660 17.4% 15051 16.4% >=8.50 9> ROI >=8.75 19 11200 17.4% 11200 19.0% 6963 21.5% 18163 19.8% 9.25> ROI >=9 13 5650 8.8% 5650 9.6% 3806 11.7% 9456 10.3% 9.50> ROI 7 3330 5.2% 3200 5.4% 2180 6.7% 5380 5.9% >=9.25 9.75> ROI 4 2800 4.4% 2800 4.7% 2446 7.5% 5246 5.7% >=9.50 10 > ROI 2 1000 1.6% 1000 1.7% 616 1.9% 1616 1.8% >=9.75 ROI >= 10 3 241 0.4% 0 0.0% 0 0.0% 0 0.0% Total 141 64251 100.0% 59067 100.0% 32435 100.0% 91501 100.0% Note: Principal Outstanding and Interest to be paid are calculated since 2015-16 and onwards

4.2.3 Fiscal space due to pre-payment

Our proposed restructuring would result in creation of fiscal space to the extent of Rs. 716 crores. The market lo an, which were taken at 9% or more and having interest payment due of at least 8 years are considered for pre-payment proposal (Table 36). There are 17 loans of this type and the total principal outstanding for this category of loan is Rs 9,200 crores. These loans were taken in the year between FY 2012-13 and FY 2014-15. We propose to pay this amount of high cost loan by taking fresh loan at current rate i.e. 8.05%. The tenure of the fresh loan is assumed to be of 10 years with 9 years of moratorium. The fiscal space which it would provide to the state is shown below. It is calculated by comparing the payment schedule of high cost loan and fresh loan at present value. The discount rate for present value calculation is taken at 8%.

Table 36: Fiscal space in terms of NPV due to pre-payment of high cost market loan with Fresh Loan of tenure 10 years in Rs crore (for Loan with balance interest pay out period >=8 years)

Item Principal Interest to be Total Amount Outstanding paid to be paid

Present Value of High Cost Loan 4968 5717 10685 Present Value of Fresh Loans 4602 5367 9969 (i.e., taken at the rate of 8.05% with 10 years tenure) Savings due to Pre-Payment 366 350 716

However, it is not recommended to pre-pay all the high cost loans at one go. As it would put burden on the government in the same period and also would be difficult to take that much of loan at a time. The top five market loans in terms of interest rate and amount are selected to pre-pay at first. The total fiscal space generated due to this is Rs. 321 crores in present value terms. The total loan amount which has to be pre-paid for these five loans is Rs. 3,300 crores.

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Table 37: Fiscal Space in terms of net present value due to pre-payment of the top 5 high cost loan (in Rs. Crore)

Loan Number Tenure Rate of Loan Present Presen Fres Present Present Fiscal Fiscal Total * (in Interes Amoun Value of t Value h Value of Value of space space Fisca Years) t (%) t Princip of Loan Principal on Interest on on on l al Interes ROI Correspondi Correspondi Princip Interes spac t (%) ng Fresh ng Fresh al t e Loan Loan 7/2/2013- 10 9.87 500 270 333 8.05 250 292 20 41 61 2FB2/750 7/2/2013-2FB- 10 9.72 500 270 315 8.05 250 292 20 23 43 II/769 7/2/2013- 10 9.7 500 270 314 8.05 250 292 20 22 42 2FBII/840 7/2/13/2FBII/166 10 9.69 600 324 392 8.05 300 350 24 42 66 7/2/14-2FBII/813 10 9.63 1200 600 809 8.05 600 700 0 108 108 Total 3300 1735 2162 1651 1925 84 237 321 Note: * Tenure of the Fresh Loan is same as the Tenure of the corresponding high cost loan. The first 4 loans are taken in 2013-14 and the last one in 2014-15

4.2.4 NSSF Analysis

The National Small Savings Fund (NSSF) invests its net collection as loan to Centre and State/UT Governments. The interest rate of NSSF loan to Centre and States for Financial Year 2015-16 was 9.5%. Although the NSSF is burdensome to the state’s economy, it has to mandatorily take its share. The Table 38 below presents the year-wise payment schedule for Punjab government towards the NSSF loans taken in the past. It is evident from the table that the burden on the state is quite high in the coming years.

Table 38: Year-wise Principal and Interest payment schedule for NSSF (in Rs. crores)

Financial Year Principal Outstanding Interest to be paid Total Amount to be paid 2015-16 1195 2159 3354 2016-17 1267 2042 3309 2017-18 1267 1917 3185 2018-19 1296 1793 3088 2019-20 1336 1666 3001 2020-21 1438 1535 2973 2021-22 1438 1395 2833 2022-23 1438 1254 2692 2023-24 1438 1114 2552 2024-25 1438 973 2411 2025-26 1356 833 2188 2026-27 1239 701 1940 2027-28 1169 582 1751 2028-29 1038 469 1507 2029-30 869 371 1240 2030-31 687 289 976 2031-32 517 223 740 2032-33 367 174 542 2033-34 331 140 471 2034-35 322 108 430 2035-36 243 78 321 2036-37 170 55 225 2037-38 170 39 209 2038-39 142 23 165 2039-40 102 10 112 Total 22272 19943 42216

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The below table shows the amount of loans taken under NSSF and market loans categories for various years. It reflects that the share of NSSF loan in the total loan taken by the Punjab government has reduced over the years. In the early years i.e. FY 2000 and FY 2001 the share was more than 99% and it has come down to 17.2% in FY 2014-15. In the year FY 2011-12, it was even nil. Given the availability of market loan, this particular loan doesn’t fit to be the desirable category loan. However a comparable analysis can only decipher this notion. In FY 2014-15, the government has taken a NSSF loan of Rs. 2045 crores.

Table 39: NSSF and Market Loan Share in Total Loan of Punjab Government (in Rs crore)

Share of Loan Share of Loan Loan Amount Financial Loan Amount Total Loan Amount of NSSF Amount of Market of Market Year of NSSF Amount in Total Loan Loan in Total Loan Loan Amount (in %) Amount (in %) 1999-00 1712 1715 99.8% 2000-01 2330 2350 99.2% 2001-02 1395 419 1835 76.0% 22.8% 2002-03 2627 1141 3788 69.4% 30.1% 2003-04 3376 2292 5669 59.6% 40.4% 2004-05 3641 1831 8974 40.6% 20.4% 2005-06 3402 1601 5280 64.4% 30.3% 2006-07 2990 981 4300 69.5% 22.8% 2007-08 729 4121 5213 14.0% 79.1% 2008-09 190 5061 5778 3.3% 87.6% 2009-10 1576 4785 6826 23.1% 70.1% 2010-11 1447 5128 9318 15.5% 55.0% 2011-12 0 8200 10685 0.0% 76.7% 2012-13 561 9700 10671 5.3% 90.9% 2013-14 800 9000 10666 7.5% 84.4% 2014-15 2045 8950 11886 17.2% 75.3% Total 28821 63210 104952

An analysis has been conducted that if the loan amount taken under NSSF was replaced by market loan, how much the state government would have benefitted. Given the fiscal condition of the state, it is imperative to take every measure to cut down on non-essential expenditures. The interest rate on NSSF and market loan in FY 2015-16 were 9.5% and 8.05% respectively. The state government has taken a NSSF loan of Rs. 2,045 crores in FY 2014-15 at the prevailing rate of interest of 9.5%. If the same amount of loan would have been taken under market loan at market interest rate of 8.05%, the state must have saved some amount on loan repayment. The final outcome of the analysis shows that the state has to pay Rs. 2262 crores only under market loan instead of Rs. 2362 crores under NSSF loan in terms of net present value. On the loan amount of Rs. 2045 crores it could have easily saved Rs. 100 crores, which is 5% of the loans taken. The 10 years bond yield rate in that period was 7.8%. As the payments for both the loans are done half yearly, the effective half yearly discount rate came out to be 3.83%.

Table 40: Benefits of replacing NSSF loan with market loan

NSSF Market Loan

Loan Amount (in 2014-15, in Rs crores) 2045

Rate of Interest (in %) 9.50 8.05 Moratorium (in Years) 0 9 Tenure (in Years) 10 10 Effective Half Yearly Discount Rate (in %) 3.83 3.83 Total Amount to be paid (NPV, in Rs crores) 2362 2262

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4.3 Own Tax Revenue Analysis On request of the Finance Department, GoP, the TA consultants conducted a study and analysed the estimated VAT revenue on mobile sales and Cess collection on petroleum products. Objective of the study was to estimate the potential revenue collection. The TA consultants calculated the target VAT rate on petroleum products, which provide enhanced revenue to the government and benefits to the consumers at the same time. The results of the analysis were discussed with the finance department during April-July 2015.

The analysis and results as submitted to the Finance Department is produced below. 4.3.1 Introduction

Own tax revenue (OTR) contributes significantly to the government’s revenue. In FY 2014-15, OTR contributed 65.5% towards the total revenue receipts of the state. The average contribution of OTR in total revenue receipts in the period FY 2016-17 to FY 2018-19 is projected to be 60.5%. OTR comprises of VAT, state excise, stamp & registration fees, motor vehicles, taxes & duties on electricity and other own taxes. VAT contributes maximum towards the OTR out of these components. It contributed 60.5% towards OTR in FY 2014-15. It is projected that it would contribute around 58% towards OTR in the period FY 2016-17 to FY 2018-19.

The analysis to estimate Cess Collection on petroleum products, finding target VAT rate on petroleum products and potential VAT collection on mobile sales are presented below. 4.3.2 VAT Analysis

VAT is the major source of revenue for the state. However, interstate analysis shows that the recent trend is not encouraging. In FY 2014-15, VAT growth rate for Punjab was 4% whereas, Haryana the neighbouring state witnessed a growth rate of 13%. In FY 2015-16 Q1, the VAT growth rate was 1.39%, whereas Bihar witnessed a growth rate of 33.62%. Other major states like Karnataka, Rajasthan and Haryana also performed better in this regard.

VAT on petroleum products are the major contributor in the bucket. It is in the interest of the government to focus more on this sector to maximise the overall VAT revenue. To achieve this a cess on diesel and petrol has been introduced by the state government in early 2015. Also, by rationalizing the VAT rate on petroleum products the respective revenue can be maximised, as we proposed.

4.3.2.1 Cess on Petrol and Diesel It has been proposed by the department to levy a cess of Re. 1 on each litre of petrol and diesel. The projected consumption for FY 2015-16 has been calculated based on the average growth rate of historical consumption.

Table 41: Consumption of Petrol and Diesel in MT

Year 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Petrol 508,037 502,682 555,911 589,816 490,594 578,378 608,611 Diesel 2,703,565 2,631,112 2,921,702 2,936,445 3,109,249 3,254,678 3,212,694 Source: Economic Survey of Punjab 2012-13 and 2014-15

The average growth rate of consumption of petrol and diesel were 4% and 3% respectively. The total additional revenue by this would be Rs. 505 crores for FY 2015-16. The revenue generated by diesel and petrol consumption was Rs. 413 crore and Rs. 92 crore respectively (Table 42). It is evident that diesel was the major contributor, being an agrarian state, the sale of diesel is quite high as compared to the petrol.

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Table 42: Consumption and Cess Collection for 2015-16

Cess Collection Items Consumption in MT in Rs. Crore Petrol 653,918 92 Diesel 3,409,905 413 Total 4,063,823 505

4.3.2.2 VAT rate simulation for petroleum products

Introduction VAT is an ad-valorem tax which means the tax is imposed on the basis of value of the goods. It is immaterial to the quantity or volume sold rather it is dependent on ‘value’ sold. Hence, when price level of petroleum products goes down, the tax collection goes down even if the quantity sold is maintained at the previous level.

The international crude price has come down significantly in the recent past. As the base price has gone down, per litre VAT collection has also gone down. However, the lower price boosts consumption. When the base prices are low, the government may increase the VAT rate to increase the per litre VAT collection. Government may cut down the VAT rate when the base prices are high to lessen the burden on the consumers. The rationale behind this approach is that – the consumers are more concerned about the final price rather than the base price and tax component. As long as the final price is set prudently and made dynamic to pass some benefits to the consumers, it can be a win-win situation for the government as well as consumers. We have suggested a model to make the price more dynamic taking into account the price movement. It suggests optimal VAT rate depending upon the base price of the product.

Methodology We have taken the price of petrol exclusive of VAT from mypetrolprice.com for the different period in FY 2014- 15 for Punjab. We have assumed quantity of sales to be 1000 litres at every point (as the actual figure was not available), as represented in the table below.

The calculation is done in excel. The model is dynamic and would take into account the changes, if any. Every column of the table along with the logic is explained below.

In the first column, the dates of reduction of the base price of petrol for the year FY 2014-15 have been placed. In the second column, the corresponding price of the product exclusive of VAT (PEV) is given. The prevailing VAT rate of the period was given in 14th column. Based on this information, we have calculated the price of the product inclusive of VAT which is PIV=PEV*(1+VAT rate) given in column 5th. Lower and Upper levels (3rd column) have been calculated based on PEV. The lower and upper levels are multiple of 10 and the range of the slab is 10. If price exclusive of VAT i.e., base price is Rs. 66, then the lower and upper levels will be 60 and 70. The average of the upper and lower bound of the slab (average of the slab, 4th column) has been calculated for further calculations.

Target sale price (6th column) is defined as the price, which should be attained after imposing VAT on the base price. Percentile figures have been calculated for petrol prices inclusive of VAT for the year 2014-15. The 75th percentile figure, which is Rs. 80.63 for the series has been set as the target price for the current calculation.

Elasticity (7th column) should be calculated as the ratio of average of the percentage change in quantity sales to the average of percentage change in price for the period under consideration. However, as the respective quantity sales figure was not available, it is assumed as -0.9 for the present calculation. The negative sign of elasticity shows that the quantities sold are negatively related to the price.

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The difference in the actual VAT rate and estimated VAT rate multiplied by the elasticity will give the percentage increase/decrease in the quantum of sales due to change in prices with respect to new estimated VAT rate.

Implicit VAT rate (IVAT, 8th column, IVAT = (Target price/Average of slab)-1) is calculated keeping the target price as the final retail price. Based on the experiences across the states, it is assumed that the estimated VAT rate should fall within range of 15% to 50% (Assumption 1). Revised IVAT (9th column) has been calculated by imposing assumption 1 on the IVAT. Revised IVAT, calculated in the 9th column is the final Estimated VAT rate.

New sales quantity (11th column) is calculated using formula, New Sales = Assumed Sales*(1+ (final estimated VAT rate – actual VAT rate)*Elasticity). The revised VAT collection under the assumed scenario (considering the corresponding estimated VAT rate and new sales quantity) is calculated in column 12th. The VAT collection under existing scenario is calculated in 13th column by considering ongoing VAT rate and corresponding assumed sales quantity. The proposed mechanism gives higher revenue to the government in a year as well as transfers benefit to the consumers when required.

Table 43: Optimum VAT rate calculation model

Date of Pric Slab Averag Price Target Elasti Implicit Revised Assum New VAT VAT Curre Reductio e e inclusive Price city VAT if we implicit ed Sales Collect collectio nt n (Exc of the of VAT (Price charge VAT with Sales Quantit ion n with VAT lusiv Slab inclusive 'target assumptio Quantit y (Ltrs) with current Rate e of VAT) price' n 1 y (Ltrs) target existing in of with price VAT rate Punja VAT different at (in Rs.) b ) percentil differe es nt ptile (in Rs.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 01.08.14 67.1 60- 65 87.88 80.63 -0.90 24% 24% 1000 1061 16580 20020 30.8% 9 70 31.08.14 66 60- 65 86.33 24% 24% 1000 1061 16580 20020 70 01.10.14 61.6 60- 65 80.63 24% 24% 1000 1061 16580 20020 4 70 23.10.14 60.9 60- 65 79.70 24% 24% 1000 1061 16580 20020 3 70 01.11.14 59.6 50- 55 77.97 47% 47% 1000 858 21985 16940 1 60 1.12.14 57.2 50- 55 74.82 47% 47% 1000 858 21985 16940 60 16.12.14 56.2 50- 55 73.63 47% 47% 1000 858 21985 16940 9 60 01.01.15 54.2 50- 55 71.01 47% 47% 1000 858 21985 16940 9 60 17.1.15 52.2 50- 55 68.40 47% 47% 1000 858 21985 16940 9 60 After 49.8 40- 45 65.23 79% 50% 1000 827 29473 13860 17.1.15 7 50 205720 178640

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Rationale of adopting the model State government should follow this model while setting the VAT rate for petroleum products. In every case this model would give a scientifically justified rate. This will not only maximize the revenue for the department but also provide relief to the consumers when the base price goes up. This will also save the precious time of the officers who goes on deciding VAT rate every time when there is a change in the base price.

As illustrated in the above table, in the changed scenario the government was able to make Rs. 2, 05,720 in comparison to Rs. 1, 78,640 in case of existing scenario. In the absence of actual data the volume of sale was assumed to be 1000 litres, however the actual sales would be multiple time of this. So the final profit to the department would also be in that range. Actual data is needed to estimate the best result, however the analysis clearly shows that the methodology applied is providing benefit to the department in terms of higher collection and it is also transferring benefit to the consumers by lowering the VAT rate when the base price goes up. 4.3.3 Tax collection on mobile sales

VAT is imposed on the sale of mobiles. Punjab is a high end consumer state and so has a potential to contribute immensely to the exchequer. VAT rate on mobile is fixed at 8.5%. The volume of mobile sales and price of each unit is required to estimate the revenue precisely. However, these data are hard to find. So our calculations would be based on certain assumptions.

4.3.3.1 Estimation of VAT collection Based on population of Punjab for census 2001 and census 2011, growth rate has been calculated using compound annual growth rate (CAGR). The population for 2015 is calculated using 2011 census population as base and compound annual growth rate (CAGR). The whole segment is divided into three categories 0-14 years of age, which don’t carry a mobile; 15-59 years of age and 60+ years of age. The CAGR for the population segment 15-59 and 60+ are 2% and 3% respectively. The projected population for categories 15-59 and 60+ for 2015 are 19,261,926 and 3,233,526 respectively. The corresponding population registered in census 2011 was 17,792,572 and 2,865,817 respectively. It is assumed that people in the 15-59 category buy mobiles of all categories like high end (Rs. 20,000 per unit), medium end (Rs. 10,000 per unit) and low end (Rs. 3,000 per unit). However 60+ people buy mobiles only from medium and low end categories. It is also assumed that every five years they change their mobile. Over and above to these it is also assumed that 40% of the people buy their hand set from outside Punjab.

The estimated VAT collection for year 2015 is quite appreciable, which is Rs. 238 crores. The majority of the revenue is coming from the population group of 15-59. As figures suggest this can be a very effective segment of revenue for the state government, however a strong administrative effort is required to materialize the same.

Table 44: Estimated VAT collection from mobile sales

Particulars 15-59 60+ Total Population (Census 2011) 17792572 2865817 20658389 Compound Annual Growth Rate (CAGR) 2% 3%

Population (2015) 19261926 3233526 22495452 Average Price of Mobile (in Rs. per unit) 11000 6500

VAT collection (in Rs. Crore) 216 21 238 Note: 1) VAT rate on mobile is 8.5%. 2) Assumption- a) 40% people buy their cell phone outside Punjab, b) Every person change their mobile after 5 years, c) People in range of 15-59 buy a mobile from each category (A, B and C), but 60+ people buy only from the category B and C. Prices are assumed Rs. 20,000, Rs. 10,000 and Rs. 3,000 for A, B and C category of mobiles.

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4.4 Estimation of profession tax collection Once the professional tax bill is approved in the State Assembly, it will become one of the major sources of revenue for Government of Punjab. The estimated professional tax collection is calculated in the following manner:

4.4.1.1 Method I- Estimation based on the number of employees in private and public sector The number of employees in public and private sector has been projected for FY 2015-16 with the help of historical data (Table 45). The average growth rate of employees for public and private sector are 2% and 9% respectively (Table 46).

Table 45: Sector wise number of Employees

Category 2007-08 2008-09 2009-10 2010-11 2011-12 Public Sector 462,816 405,501 505,098 488,077 493,439 Private Sector 324,850 213,313 347,947 337,035 366,478 Total 787,666 618,814 853,045 825,112 859,917 Source: Economic Survey of Punjab, 2012-13 and Economic Survey of Punjab, 2013-14 Table 46: Sector wise projected number of Employees

Assumed Growth Category 2011-12 (A) 2015-16 (P) Rate Public Sector 2% 493,439 544,166 Private Sector 9% 366,478 509,670

Total 859,917 1053,837 Source: Economic Survey of Punjab, 2012-13 and Economic Survey of Punjab, 2013-14 Note: A=Actual, Actual value was available until 2011-12. P=Projected

If every employee assumed to pay Rs. 200 per month towards this tax, then the total profession tax collection for FY 2015-16 would be Rs. 253 crore. Table 47 shows the projected number of employees and respective tax collection from each sector.

Table 47: Estimated Professional Tax Collection for 2015-16

Category Employees Collection (in Rs Crore) Public Sector 544,166 131 Private Sector 509,670 122 Total 1053,837 253 Source: Economic Survey of Punjab, 2012-13 and Economic Survey of Punjab, 2013-14

4.4.1.2 Method II – Estimation based on number of income tax payers

 Total number of income tax payees are 14 lakhs (As communicated to Finance dept. by IT Authorities)

 Profession tax collection would be: Number of Income Tax Payee*Rs. 200*12 months= Rs. 336 crore

If every tax payee starts contributing Rs. 200 per month towards profession tax, then the government would be able to collect Rs. 336 crore annually.

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5 Annexure A: MTFF - policy action no. 17

5.1 Projection Methodology MTFF establishes fiscal policy objectives of a Government and presents a set of projections with comprehensive goals in respect to targeted macroeconomic/ fiscal outcomes (typically for a period from 3 to 5 years). The exercise entails analysis of historical data along with assessment of implications of futuristic policies on fiscal parameters.

Based on the historical data from FY 2002 onwards (or, of a subset from this period), key fiscal indicators have been projected for the period of FY 2016-17 to FY2018-19. The base year for calculating the projections is estimates of FY 2015 (and FY 2014 for select few components).

5.1.1 Broad approaches

Below presented are the various approaches followed to generate baseline forecasts of the state’s fiscal variables:

Projections based on average annual rate of growth:

Average annual growth rate has been used as the basis for forecasting estimates of several variables of the revenue and expenditure side. The average annual rate of growth has been arrived by analysing the available historical data.

Projections based on buoyancy:

Buoyancy is the estimate of percentage change in tax vis-à-vis percent change in GSDP in that year. This method estimates the responsiveness of the tax revenue to changes in the base (such as GSDP), including the effect of changes in the structure of the tax. Symbolically, this could be expressed as ∆R/R ÷ ∆Y/Y. If this coefficient comes out to be greater than unity, that tax revenue is said to be buoyant, i.e. productive in terms of realising relatively higher tax revenues as GSDP grows.

Buoyancy has been computed by running the Log-Log regression, with the concerned equation assuming the following form:

Log (OTR source)t = α+ β log (GSDP)t, where the β co-efficient denotes the concerned tax buoyancy. For projecting two sources of own-tax revenue (OTR), namely state excise and motor vehicles (taxes on vehicles and tax on goods and passengers combined) buoyancies with respect to GSDP have been computed.

Projections based on rule of thumb growth rate:

In the absence of any stable and reasonable growth rate in the past, 10% (or 5%) annual growth has been assumed for certain variables as mentioned in subsequent table.

GSDP projections:

The projection for GSDP of Punjab has been conducted using the annual growth rate of 12.63% on the basis of the recommendation of the 14th Central Finance Commission for FY 2016 – FY 2019.

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5.2 Revenue projections The table below provides assumptions and basis for projections of various revenue sources over the medium term.

Table 48: Assumptions and basis for projection of receipts

Annual growth Item Explanation rate (p.a.) This is the aggregate of own-tax revenues, own non-tax revenues, Revenue Receipts share in central taxes and duties and grants from the Centre. OTR is sum of value-added tax (VAT), state excise, stamp & Own-Tax registration, motor vehicle tax, taxes on electricity & duties and other Revenue (OTR) own taxes. This is the major contributor towards OTR of the government. While Assumed growth historical growth rate has been quite encouraging barring few years, VAT rate (5%) an annual growth rate of 5% has been assumed for FY2016-18 given that Good and Services Tax is introduced in India in due course. After VAT, state excise contributes maximum to the OTR. The growth rate to forecast the figure from FY 2016-17 to 2018-19 has Buoyancy with been calculated using buoyancy with respect to GSDP. The calculated State Excise respect to GSDP buoyancy is 0.76. Given the 14th CFC recommended GSDP annual (9.61%) growth rate of 12.63%, the state excise growth rate comes to 9.61% (0.76*12.63%). This component contributes significantly to the OTR. The growth rate to forecast the figure from FY 2016-17 to 2018-19 has been Buoyancy with Motor Vehicle calculated using buoyancy with respect to GSDP. The calculated respect to GSDP Tax buoyancy is 0.78. Given the 14th CFC recommended GSDP annual (9.88%) growth rate of 12.63%, the motor vehicle tax growth rate comes to 9.88% (0.78*12.63%). Stamp & Assumed growth Rule of thumb applied due to absence of a stable trend as the Registration rate (5%) historical data exhibits high variability. Fees Taxes and Assumed growth Rule of thumb applied as the historical trend growth rates are not duties on rate (10%) reasonable. electricity Assumed growth Rule of thumb applied due to absence of a stable trend as the Other own taxes rate (10%) historical data is marked with striking fluctuations. This source of revenues is broadly divided into two parts, viz. ‘state Own Non-Tax lotteries’ and ‘other non-tax revenue excluding revenue from state Revenue lotteries’. Enactment and inclusion of stringent conditions for Punjab State Lotteries in the year 2010 led to decline of its revenue from INR Average Annual 38,007 million in FY2011 to INR 532.5 million in FY2012. Due to State Lotteries Growth Rate erratic growth rate observed prior to FY2012, the average annual (17.2%) rate of growth for the period FY2013 to FY2015 has been taken for projections. Own Non-Tax Assumed growth Rule of thumb applied due to lack of any systematic trend. Revenue rate (10%)

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Annual growth Item Explanation rate (p.a.) excluding Revenue from State Lotteries First year annual Share in This is based on expected annual growth rate in FY2016 with respect growth rate under Central Taxes & to expected FY2015 estimate under the 14th Central Finance 14th CFC period Duties Commission award period. (12.44%)

Grants from Centre/ Assumed growth Rule of thumb applied due to lack of any systematic trend. Government of rate (10%) India

This is the aggregate of the ‘recovery of loans and advances’ and Non-Debt Capital Receipts ‘miscellaneous capital receipts’ for each projected year Recovery of Assumed growth loans & Rule of thumb applied in the absence of a stable or systematic trend rate (5%) advances Miscellaneous Assumed growth Rule of thumb applied in the absence of a stable or systematic trend capital receipts rate (5%)

5.3 Expenditure projections The table below provides assumptions and the underlying basis for medium term projections for major expenditure components.

Table 49: Assumptions and basis for projection of expenditure items

Item Methodology Explanation This is the aggregate of items of interest payment, salaries, pension, power Revenue Expenditure subsidy and other current expenditures. Average annual Interest Average annual interest payment growth rate for the last 5 years has been growth rate Payment taken to project the amount for the future years. (8.44%) . The annual growth rate in basic salary is assumed to be a modest 3% given the high current levels of salary disbursement in the State. . Dearness Allowance (DA) amounted to 1.13 and 1.19 times of the Salaries basic salary for FY 2014-15 and FY 2015-16 respectively. From FY 2016-17 onwards, DA is taken as 1.25 times of the basic salary. . Annual growth rate for house rent allowance is assumed to be 10% throughout the period. . The annual growth rate in basic pension is assumed to be a modest at 3% given the high current levels of salary disbursement in the State. Pension . DA is 1.19 times the basic pension for the year 2015-16. From FY 2016-17 onwards, the DA is taken as 1.25 times of the basic pension. . The growth rate for the fixed component is assumed to be 6%

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Item Methodology Explanation throughout the period. Power Assumed growth Rule of thumb applied due to absence of a systematic trend Subsidy rate (10%) Other Revenue On the basis of the average annual rate of growth between FY 2002 to FY Average Annual Expenditure 2014, the other revenue expenditure excluding power subsidy is projected Growth Rate (excluding at a growth rate of 5.46%. FY 2015 growth rate is not taken for the average (5.46%) power calculation, as this year witnessed very erratic growth. subsidy)* Capital expenditures Capital outlay to GSDP ratio was above 1% between FY 2005 to FY 2010. However, it has been on a declining trend from FY 2008 onwards and Assumed growth stood at 0.85% in FY 2014. Capital rate (1.15% and Given the sustained focus of the GoP on investments while maintaining Outlay 1.30%) fiscal discipline, this ratio is assumed to be 1.15% of GSDP for the FY2015, FY 2016 and FY 2017, and then further step up to 1.30% of GSDP for the years 2018-19 and 2019-20. Loans & Advances Assumed growth given by Rule of thumb applied in the absence of a systematic trend. rate (5%) State Government Projections for discharge of internal debt for the two components below is done as follows: . State government’s current debt portfolio as on 31 March 2015: The portfolio is varied with institutional loans (e.g. from NABARD), externally aided projects (EAPs) of multilateral / bilateral institutions, NSSF loans and market borrowings. Discharge of this debt is projected based on actual respective repayment maturity schedules available. Discharge . New loans taken by the State Government from FY 2015 until FY of Internal Debt Model 2018: Quantum of new loans to be taken between FY2015 to FY 2018 Debt is computed based on the projected gross borrowings (i.e. sum of projected fiscal deficit and repayment of existing debt). Further, current debt composition is assumed to continue in these new loans to be taken over four years as well. Next, on the basis of realistic assumptions on moratorium period and repayment term for each of these categories of loans, discharge of new debt, i.e. principal repayment (from FY 2015 to FY 2018) on new loans has been projected. This has been projected in a similar manner as above for the first component on current portfolio of central loans to GoP. Since the practice Repayment of seeking new fresh loans by State Governments. from the Centre of loans to Debt Model (Government of India) no longer exists since implementation of the centre recommendations of the 12th Central Finance Commission, the second component does not require to be computed/projected.

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

5.4 Medium term fiscal projections The table below shows the projected baseline figures for the period of FY 2016-17 to 2018-19. These projections were approved by the Finance Department on 09 March 2016

Table 50: Medium-term Fiscal Framework Projections for Govt. of Punjab (FY2016 to FY2018)

2014-15 2015-16 2016-17 2017-18 2018-19

S. No. INR in Millions expected* expected* (Proj.) (Proj.) (Proj.) I Total Receipt (A+F) 391,414 457,728 495,395 536,566 581,599 A Revenue Receipts 390,230 456,480 494,084 535,190 580,154 B Own Tax Revenue 255,700 285,150 303,599 323,380 344,598 2 Other Own Taxes 1,270 1,510 1,661 1,827 2,010 C Own Non-tax revenue 28,800 40,620 44,753 49,311 54,340 1 State Lotteries 840 985 1,154 1,353 1,585 Own Non-Tax revenue excluding 2 27,960 39,635 43,599 47,959 52,755 revenue from State Lotteries D Share in Central taxes & duties 47,030 80,090 90,050 101,249 113,840 Grants from Centre/ Government E 58,700 50,620 55,682 61,250 67,375 of India F Non-Debt Capital Receipts 1,184 1,248 1,311 1,376 1,445 1 Recovery of loans & advances 1,184 1,243 1,305 1,371 1,439 2 Miscellaneous capital receipts - 5 6 6 6 II Total expenditure 532,309 617,114 666,167 737,136 802,861 A Revenue Expenditure 466,130 531,720 567,323 597,410 629,513 1 Interest payment 89,600 97,640 105,881 114,817 124,508 2 Salaries 193,927 205,120 216,809 223,313 230,012 3 Pension 71,124 75,400 79,733 82,125 84,589 4 Power Subsidy 52,470 65,020 71,522 78,674 86,542 Other revenue expenditure (Excluding 5 59,009 88,541 93,379 98,481 103,863 power subsidy)* B Capital Outlay 31,180 43,490 52,952 59,639 75,933 Loans and Advances given by C 3,269 3,596 3,955 4,351 4,786 State Government D Discharge of internal debt 29,310 38,308 41,937 75,735 92,629 E Repayment of Loans to the centre 2,420 1,862 1,860 1,819 1,818 Memo Items:

Outstanding debt and other III 1,126,276 1,247,353 1,376,188 1,501,023 1,629,656 liabilities as on 31st March 2015 GSDP at factor cost (Current IV 3,680,110 4,088,150 4,604,483 5,186,030 5,841,025 Prices) V Key Balances

Revenue balance [Surplus (+), deficit 1 (75,900) (75,240) (73,239) (62,220) (49,359) (-)] [I.A - II.A] Fiscal balance [Surplus (+), deficit (-)] 2 (109,165) (121,077) (128,835) (124,834) (128,633) [(II.A-I.A)-I.F.2+II.B+(II.C-I.F.1)] Primary balance [Surplus (+), deficit 3 (19,565) (23,437) (22,954) (10,017) (4,126) (-)] (V.2 -II.A.1) VI Indicators as % of GSDP

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

2014-15 2015-16 2016-17 2017-18 2018-19

S. No. INR in Millions expected* expected* (Proj.) (Proj.) (Proj.)

1 Own tax revenue 6.95% 6.98% 6.59% 6.24% 5.90% 2 Own non-tax revenue 0.78% 0.99% 0.97% 0.95% 0.93% 3 Total revenue expenditure 12.67% 13.01% 12.32% 11.52% 10.78% 4 Revenue surplus (+)/ deficit (-) -2.06% -1.84% -1.59% -1.20% -0.85% 5 Capital Outlay 0.85% 1.06% 1.15% 1.15% 1.30% 6 Fiscal surplus (+)/ deficit (-) -2.97% -2.96% -2.80% -2.41% -2.20% 7 Primary surplus (+)/ deficit (-) -0.53% -0.57% -0.50% -0.19% -0.07% 8 Total Debt and other liabilities 30.60% 30.51% 29.89% 28.94% 27.90% * Base year for MTFF projections are based on estimates for FY 2015-16 (data as provided by the Finance Department, Govt. of Punjab) for all except for two revenue items of: (a) state lottery, (b) recovery of loans & advances, and three expenditure items of: (c) salary, (d) pension and (e) loans and advances given by State Government for which the base year is expected estimates for FY 2014-15.

Table 51 shows the budget estimates for FY2016-17 BE, as approved in the Budget at a Glance for FY2016-17 document, which are closely in line with the MTFF projections made for that year.

Table 51: Budget Estimate as approved by the GOP in the Budget at a Glance for FY2016-17

Fiscal Variable (INR in Millions) MTFF Budgetary Projection Estimates (BE) I Total Receipt (A+F) 495,395 502,802 A Revenue Receipts 494,084 501,809 B Own Tax Revenue 303,599 305,473 C Own Non-tax revenue 44,753 38,071 1 State Lotteries 1,154 2 Own Non-Tax revenue excluding revenue from State 43,599 Lotteries D Share in Central taxes & duties 90,050 90,050 E Grants from Centre/ Government of India 55,682 68,213 F Non-Debt Capital Receipts 1,311 993 1 Recovery of loans & advances 1,305 993 2 Miscellaneous capital receipts 6 - II Total expenditure 666,167 863,869 A Revenue Expenditure 567,323 581,637 1 Interest payment 105,881 107,879 2 Salaries 216,809 195,850 3 Pension 79,733 77,677 4 Power Subsidy 71,522 56,000 5 Other revenue expenditure (Excluding power subsidy)* 93,379 144,231 B Capital Outlay 52,952 48,040 C Loans and Advances given by State Government 3,955 3,997 D Discharge of internal debt 41,937 31,914 E Repayment of Loans to the Centre 1,860 3,280 Memo Items: III Outstanding debt and other liabilities as on 31st 1,376,188 1,381,655 March IV GSDP at factor cost (Current Prices) 4,604,483 4,543,980

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Fiscal Variable (INR in Millions) MTFF Budgetary Projection Estimates (BE) V Key Balances (derived) 1 Revenue balance [Surplus (+), deficit (-)] [I.A - II.A] (73,239) (79,828) 2 Fiscal balance [Surplus (+), deficit (-)] [(II.A-I.A)- (128,835) (130,872) I.F.2+II.B+(II.C-I.F.1)] 3 Primary balance [Surplus (+), deficit (-)] (V.2 -II.A.1) (22,954) (22,993) VI Indicators as % of GSDP (derived) 1 Own tax revenue 6.59% 6.72% 2 Own non-tax revenue 0.97% 0.84% 3 Total revenue expenditure 12.32% 12.80% 4 Revenue surplus (+)/ deficit (-) -1.59% -1.76% 5 Capital Outlay 1.15% 1.06% 6 Fiscal surplus (+)/ deficit (-) -2.80% -2.88% 7 Primary surplus (+)/ deficit (-) -0.50% -0.51% 8 Total Debt and other liabilities 29.89% 30.41% Source: FY2016-17 BE from Government of Punjab, Finance Department, Budget at a Glance for FY2016-17

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

6 Annexure B: MTEF - policy action no. 18

6.1 Approach and delivery of the Training program The two-day training program on MTEF preparation, held in the Punjab Energy Development Authority (PEDA) Bhawan, Chandigarh on 6 and 7 September 2018, was based on a ‘hands-on approach’ entailing a blend of theory with practical illustrations and exercises.

An address by Mr. Abhinav Trikha, Special Secretary Expenditure, Finance Department of GOP explained the importance and overall benefits of this exercise to the attendees. The training program was characterized by high level of participation with several interactive discussions across following components of MTEF preparation process.  Process I: Top down budgeting: The objective of this exercise was to enhance their resource consciousness while preparing estimates for their Departments. An illustration was exhibited in MS Excel showing how the officials can link the MTFF (from the fiscal consolidation roadmap published in the AFS) with policy priorities of the Government (from the Vision 2030 document) to arrive at likely availability of resources to them.  Process II.A: Bottom-up Budgeting - Trend Scenario: A session was held on the alternate trend scenario techniques. Officials were sensitized about the varied growth rate options that can be suitably deployed, in lieu of applying a uniform growth rate which disregards the nature of the object of expenditure under consideration.  Process II. B and C: Bottom-up Budgeting – Reform Scenario: Illustrations, exercises, quizzes were conducted on preparing logical framework which allowed the officials to gain an understanding of outputs and outcomes of various schemes and programmes, as also how to develop performance indicators to monitor progress on the same. Participants were also shared good practices to cost the interventions.  Process C: MTEF Reconciliation & Reprioritisation: A case study was exercised in a group activity format, on how to systematically approach re-prioritising the estimates among schemes and programs when the bottom up budgeting estimates (i.e. expenditure requirements) exceed the top-down estimates (i.e. estimates likely availability of resources). Select training material used in the Program is provided below:

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

82 participants from more than 35 Departments/ autonomous institutions of GOP shared their feedback in the form circulated in the end. As per the feedback received:  All participants found the content of Training Program to be useful to them;  All participants expressed content with the pace of the program and the fact that contents were well explained to them.  Almost all participants plan to use at least some part/ components in their work and are most likely to recommend this training to others.

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume I)

Thank you

PwC disclaims all liability to any third party who may place reliance on this report and therefore does not assume responsibility for any loss or damage suffered by any such third party in reliance thereon. This report is provided on the basis that it is for the use of Government of Punjab and Asian Development Bank only and that it will not be copied or disclosed to any third party or otherwise quoted or referred to, in whole or in part, without PwC’s prior written consent. Furthermore, PwC will not be bound to discuss, explain or reply to queries raised by any agency other than the intended recipients of this report.

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Supporting the Punjab Development Finance Program

ADB TA 8759-IND

Final Report (Volume -II)

(Medium Term Expenditure Frameworks)

November 2018

TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume II) Medium Term Expenditure Framework

Table of Contents

1 Introduction ...... 10

1.1 Program Background ...... 10 1.2 Context of this report ...... 10

2 MTEF Concept & Methodology ...... 12

2.1 Concept ...... 12 2.2 MTEF Preparation Methodology ...... 13

3 MTEF for Department of Health and Family Welfare ...... 22

3.1 Long-term sector strategy & departmental objectives ...... 22 3.2 Top-Down Budgeting- Estimation of Resource Envelope ...... 25 3.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario ...... 28 3.4 Bottom-Up Budgeting- Reform Scenario ...... 41 3.5 Reconciliation and Reprioritization ...... 61

4 MTEF for School Education Department ...... 62

4.1 Long-term sector strategy & departmental objectives ...... 62 4.2 Top-Down Budgeting- Estimation of Resource Envelope ...... 67 4.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario ...... 69 4.4 Bottom-Up Budgeting- Costed Reform Interventions ...... 82 4.5 Reconciliation and Reprioritization ...... 109

5 MTEF for Public Works Department ...... 111

5.1 Long-term sector strategy & departmental objectives ...... 111 5.2 Top-Down Budgeting- Estimation of Resource Envelope ...... 114 5.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario ...... 116 5.4 Bottom-Up Budgeting- Costed Reform Interventions ...... 121 5.5 Reconciliation and Reprioritization ...... 134

6 MTEF for Power Department ...... 136

6.1 Long-term sector strategy & departmental objectives ...... 136 6.2 Top-Down Budgeting- Estimation of Resource Envelope ...... 138 6.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario ...... 139 6.4 Bottom-Up Budgeting- Costed Reform Interventions ...... 141 6.5 Reconciliation and Reprioritization ...... 143

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Annexure 1. Definition of Key Performance Indicators ...... 144 Annexure 2. Definition of budget heads ...... 146 Annexure 3. List of Officials Met ...... 151

List of tables

Table 1: Components involved in construction of logical framework ...... 17 Table 2: Matrix for Data Collection ...... 20 Table 3: Allocation under Social Services sector out of total allocated outlay under FYP ...... 23 Table 4: Share of approved outlay under social services across different years ...... 24 Table 5: Actual utilization as % of approved outlay under Annual Plans in Health (%) ...... 24 Table 6: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (in INR million) ...... 26 Table 7: Estimation of Resource Ceiling for State Plan in Health (in INR millions) ...... 27 Table 8: Estimation of MTEF Budget Resource Ceiling for DoH&FW (in INR million) ...... 27 Table 9: Trend growth rates used in baseline projections, DoH&FW ...... 28 Table 10: MTEF Projections for plan schemes- Trend Scenario (in INR millions) ...... 29 Table 11: Women’s Component Plan in the Trend scenario projections for plan schemes under MTEF (in INR million) ...... 39 Table 12: MTEF projections for non-plan schemes- Trend Scenario (in INR million) ...... 40 Table 13: Summary of plan and non-plan expenditure projections under Trend Scenario ...... 40 Table 14: Share of revenue and capital expenditure projections on medical and public health in total departmental expenditure, DoH&FW ...... 41 Table 15: Logical-framework (log-frame) for the DoH&FW, GoP for schemes presently running under the department ...... 42 Table 16: Health indicators in Punjab viz-a-viz national average and other progressive states ...... 50 Table 17: Intra-state performance on select indicators in health sector ...... 53 Table 18: Past trend in performance indicators, DoH&FW, Punjab ...... 54 Table 19: Expenditure under the DoH&FW, Punjab (in INR million) ...... 54 Table 20: Trend growth in components of department expenditure for the period 2012-13 to 2014-15 (RE), DOH&FW ...... 55 Table 21: Share of Plan and Non Plan Expenditure in Total Expenditure- DoH&FW ...... 55 Table 22: Actual expenditure as a % of BE under capital account, DoH&FW, Punjab ...... 55 Table 23: Population based density of primary healthcare infrastructure in Punjab and India ...... 57 Table 24: Cost projections for construction of primary health facilities ...... 57 Table 25: Additional burden on the exchequer towards salary payment to the Directorate of Homeopathy (in INR million) ...... 58 Table 26: Additional burden on the exchequer towards salary payment (INR million) ...... 59 Table 27: Estimated expenditure (on salaries) on operationalizing additional rehabilitation centers (in INR million) ...... 60 Table 28: Bottom-up Projections of Costed Reform Interventions in DoH&FW (in INR million) ...... 60 Table 29: Reconciliation and reprioritization of projected expenditure with projected resources available to DoH&FW for the period 2016-17 to 2018-19 (in INR million) ...... 61 Table 30: Allocation under Social Services sector out of total allocated funds under FYP ...... 65 Table 31: Share of approved outlay under social services across different years...... 66 Table 32: Actual utilisation of allocated funds under Annual Plans in Education sector (%) ...... 66 Table 33: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (INR million) ...... 67 Table 34: Estimation of Resource Ceiling for State Plan in General Education (in INR million) ...... 68 Table 35: Estimation of MTEF Budget Resource Ceiling for DSE (in INR million) ...... 68

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Table 36: Trend growth rates used in baseline projections ...... 69 Table 37: MTEF Projections- Trend Scenario (Plan) (INR million) ...... 71 Table 38: Women’s Component Plan in the Trend scenario projections for plan schemes under MTEF (in INR million) ...... 77 Table 39: MTEF Projections- Trend Scenario (Non-Plan) (in INR million)...... 78 Table 40: Share of plan and non-plan expenditure- trend scenario projections ...... 81 Table 41: Share of elementary and secondary education in departmental expenditure- trend scenario projections ...... 81 Table 42: Expenditure projections by category of schemes ...... 82 Table 43: Logframe and performance indicators for schemes presently running under the department (in INR million) ...... 84 Table 44: Status of elementary education in Punjab viz-a-viz national average and other progressive states (2014-15) ...... 93 Table 45: Status of secondary and Senior Secondary education in Punjab viz-a-viz national average and other progressive states (2014-15) ...... 95 Table 46: District-wise comparison on Transition Rate and Dropout Rate...... 96 Table 47: District-wise comparison on NER and PTR ...... 97 Table 48: Past trend in performance indicators at elementary levels- DSE, GoP ...... 99 Table 49: Past trend in performance indicators at secondary and senior secondary level- DSE, GoP ...... 100 Table 50: Expenditure under DSE, GoP ...... 101 Table 51: Trend growth in components of department expenditure for the period 2010-11 to 2014-15 (RE) ...... 101 Table 52: Share of Plan and Non Plan Expenditure in Total Expenditure- DSE ...... 102 Table 53: Share of elementary and secondary education in department plan expenditure ...... 102 Table 54: Share of Elementary and Secondary education in department non-plan expenditure ...... 102 Table 55: Actual expenditure as a % of BE under various major heads under DSE ...... 102 Table 56: Schemes presently running under DSE that account for 90% of total expenditure ...... 103 Table 57: Transport / Bus Services Facilities in Border and Remote Areas (in INR million)...... 105 Table 58: Technology Intervention - Installation of TV at Primary Level (in INR million) ...... 106 Table 59: Bottom-up Projections of Costed Reform Interventions in DSE (INR million) ...... 109 Table 60: Reconciliation of projected expenditure estimates with projected resources available to DSE for the period 2016-17 to 2018-19 (in INR million) ...... 109 Table 61: Final MTEF Projections of DSE (in INR million) ...... 110 Table 62: Allocation under the transport sector out of total allocated funds under FYP (in INR million) . 111 Table 63: Allocation of funds (approved outlay under Annual Plan) under the Transport Sector since 2011- 12...... 111 Table 64: Utilization of allocated funds under Annual Plans ...... 112 Table 65: Service Delivery Mechanism for the DPW ...... 113 Table 66: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (in INR million) ...... 114 Table 67: Estimation of Resource Ceiling for State Plan in Transport (in INR million) ...... 115 Table 68: Estimation of MTEF Budget Resource Ceiling for DPW (in INR million) ...... 115 Table 69: Detailed expenditure heads for which inflation is used as a basis for trend projections ...... 116 Table 70: MTEF projections- Trend Scenario for DPW (in INR million) ...... 118 Table 71: Log frame and Performance Indicators for select schemes presently running under Public Work (Roads) Directorate ...... 122 Table 72: Status of Roads in Punjab vis-a-vis national average and other progressive states (2011-12) ... 123 Table 73: Status of Roads in Punjab vis-a-vis national average and other progressive states (2012-13) ... 124 Table 74:Intra-State comparison of road density in FY2013-14 ...... 125 Table 75: Intra-State comparison of road density in FY2013-14 ...... 125 Table 76: Past trend in performance indicators under Road sector (all figures in Km) ...... 126 Table 77: Roads of different classes being maintained by DPW (in km) ...... 130 Table 78: Percentage of Labour, Material and Machinery in maintenance cost ...... 131 Table 79: Data for updating costing norms ...... 132 Page 4 of 153

PwC TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume II) Medium Term Expenditure Framework

Table 80: Total increase in road maintenance cost norms during 1999-2000 until 2014-15...... 132 Table 81: Updated maintenance cost norms for Ordinary Repairs ...... 132 Table 82: Updated maintenance cost norms for Periodical Repairs ...... 132 Table 83: Projections of road maintenance costs (in INR million) ...... 133 Table 84: Bottom-up Projections of Costed Reform Interventions in DPW (in INR million) ...... 133 Table 85: Reconciliation of projected expenditure estimates with projected resources available to DPW for the period 2016-17 to 2018-19 (in INR million) ...... 134 Table 86: Final MTEF Projections of DPW (in INR million) ...... 135 Table 87: Allocation under the energy sector out of total allocated funds under FYP (in INR million) .... 136 Table 88: Allocation of funds (approved outlay under Annual Plan) under the Energy Sector since 2011-12 ...... 136 Table 89: Utilization of allocated funds under Annual Plan ...... 136 Table 90: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (in INR million) ...... 139 Table 91: Estimation of MTEF Non-Plan Budget Resource Ceiling for Department of Power (in INR million) ...... 139 Table 92: MTEF Projections- Trend Scenario (all non-plan in nature) (in INR million) ...... 140 Table 93: Savings generated in agriculture subsidy disbursement (in INR million) ...... 142 Table 94: Bottom-up Projections under Reform Scenario for Department of Power (in INR million) ..... 143 Table 95: Final MTEF Projections of Department of Power (in INR million) ...... 143 Table 96: Definition of major and sub major heads under DoH&FW budget ...... 147 Table 97: Definition of detailed heads under DoH&FW budget ...... 147 Table 98: Definition of major and sub-major heads under SED budget ...... 148 Table 99: Definition of detailed heads under SED budget ...... 148 Table 100: Definition of Major Head (MH), Sub Major Head (SMH) and MiH (Minor Head) under PWD budget ...... 149 Table 101: Definition of detailed heads under PWD budget ...... 149 Table 102: Definition of major and sub-major heads under Power Department budget ...... 150 Table 103: Definition of detailed heads under Power Department budget ...... 150

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List of acronyms

Acronym Phrase Acronym Phrase

ACA Additional Central Assistance MTPF Medium Term Performance Framework National Bank for Agriculture and Rural ADB Asian Development Bank NABARD Development Acquired Immune Deficiency AIDS Syndrome or Acquired NCD Non-communicable Diseases Immunodeficiency Syndrome Alternative Innovative AIE NCTE National Council for Teacher Education Education ANM Auxiliary Nursing Midwifery NER Net Enrolment Ratio AP Annual Plan NFC National Fitness Corps Annual Status of Education ASER NFHS National Family Health Survey Report AWP&B Annual Work Plan and Budget NH National Highway Ayurveda, Yoga and AYUSH Naturopathy, Unani, Siddha NHAI National Highways Authority of India and Homoeopathy BE Budget Estimate NHDP National Highway Development Project BPL Below Poverty Line NLEP National Leprosy Eradication Programme BRGF Backward Region Grant Fund NMR Neonatal Mortality Rate BSSL Below Standard Single lane NP Non-plan Comptroller and Auditor National Programme for Control of CAG NPCB General Blindness National Programme for Prevention and Compound Annual Growth CAGR NPCDCS Control of Cancer Diabetes , Cardivascular Rate Disease and Strokes National Programme of Health Care of CBR Crude Birth Rate NPCHE Elderly National Programme for Education of CDR Crude Death Rate NPEGEL Girls at Elementary Level CE Chief Engineers NRHM National Rural Health Mission CFC Central Finance Commission NSP New Sputum Positive National Vector Borne Disease Control CHC Community Health Centre NVBDCP Programme Chairman-Cum-Managing CMD ODR Other District Road Director CPI Consumer Price Index ONTR Own Non Tax Revenue CRF Central Roads Fund OPD Out Patient Department CS Central Sector OR Ordinary Repairs CSO Central Statistics Organization OSD Officer on Special Duty CSS Centrally Sponsored Schemes OTR Own Tax Revenue CSS/ CS Centrally Sponsored Scheme PDFP Punjab Development Finance Programme

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Acronym Phrase Acronym Phrase

CWSN Child With Special Needs PED DA Dearness Allowance PEM Public Expenditure Management District Education Officer DEO (EE) PETS Public Expenditure Tracking Surveys Elementary Education District Education Officer DEO (SE) PEV Price Exclusive of VAT Secondary Education DH District Hospital PHC Primary Health Care District Institute of Education DIET PI Performance Indicator and Training District Information System for DISE PIB Press Information Bureau Education District Level Household and DLHS PICTES Punjab ICT Education Society Facility Survey Department of Health and DoH&FW PIDB Punjab Infrastructure Development Board Family Welfare Director Public Instructions DPI (EE) PIs Performance Indicators Elementary Education Director Public Instructions DPI (SE) PIV Price inclusive of VAT Secondary Education DPR Detailed project Report PMB Punjab Mandi Board DRC District Resource Centers PMGSY Pradhan Mantri Gram Sadak Yojana Educational Development EDI PMU Programme management unit Index EDUSAT Educational Satellite PNDT Pre-natal Diagnostic Techniques POWERC EE Executive Engineer Punjab State Power Corporation Ltd OM EGS Education Guarantee Scheme PPTA Engineering Procurement EPC PPP Public Private Partnership Construction Excise and Taxation ETC PR Periodical Renewal Commissioner Punjab Roads & Bridges Development ETT Elementary Teachers Training PRBDB Board EWS Economically Weaker Section PS Primary School FA Finance Accounts PSEB Punjab State Electricity Board Punjab State Industrial Development FC Finance Commission PSIDC Corporation Fiscal Responsibility and Punjab State Power Corporation FRBM PSPCL Budget Management Ltd.(POWERCOM) Fiscal Responsibility and Punjab State Transmission Corporation FRBMA PSTCL Budget Management Act Ltd.(TRANSCO) FY Financial Year PTR Pupil Teacher Ratio FYP Five Year Plan PTTI Primary Teachers Training Institute GCS General Category States PWD Public Works Department GER Gross Enrolment Ratio RBI Reserve Bank of India GFD Gross Fiscal Deficit RDF Rural Development Fund

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PwC TA8759: Supporting the Punjab Development Finance Program – Final Report (Volume II) Medium Term Expenditure Framework

Acronym Phrase Acronym Phrase

GNM General Nursing & Midwifery RE Revised Estimate GoI Government of India RFD Results Framework Document GoP Government of Punjab RIDF Rural Infrastructure Development Fund GPF General Provident Fund RMSA Rashtriya Madhyamik Shiksha Abhiyan GPI Gender Parity Index RTE Right To Education GSDP Gross State Domestic Product SC Schedule Caste State Council of Educational Research & HLEG High Level Expert Group SCERT Training HRA House Rent Allowance SCP Special Component Plan Housing and Urban HUDCO SCR Student Classroom Ratio Development Corporation High Voltage Distribution HVDS SDL Standard Double lane System Information and ICT SE Secondary Education Communication Technology Information Education IEC SED School Education Department Communication Inclusive Education for IEDSS SH State Highway Disabled at Secondary Stage IES Impact Evaluation Studies SHC Secondary Health Care IEV Inclusive Education Volunteer SMH Sub Major Head Integrated Financial IFMS SML Standard Multi-lane Management System IMR Infant mortality rate SNCU Special Newborn care Units INR Indian Rupees SOE State Object Expenditure IPD In Patient Department SP State Plan Inter State Connectivity & Scheme for providing quality Education in ISC & EI SPQEM Economic Importance Scheme Madrassas ISM Indian System of Medicine SS Secondary School Indian System of Medicine and ISM&H SSA Sarva Shiksha Abhiyan Homeopathy ITI Industrial training institute SSL Standard Single Lane IVE Inclusive Education Volunteers SSS Senior Secondary School Janani Shishu Suraksha JSSK ST Schedule Tribe Karyakaram Kasturba Gandhi Balika KGBV STD Sexually Transmitted Diseases Vidyalaya MDM Mid-Day Meal TA Technical Assistance MDR Major District Road TET Teacher Education Training MH Major Head TFR Total Fertility Rate Ministry of Human Resource MHRD TGR Trend Growth Rate Development MiH Minor Head TRANSCO Punjab State Transmission Corporation Ltd Management Information MIS TSP Tribal Sub Plan System Page 8 of 153

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Acronym Phrase Acronym Phrase United Nations International Children's MMR Maternal Mortality Rate UNICEF Emergency Fund Ministry of Roads, Transport MORTH UPS Upper Primary School and Highways MT Metric Ton VE Vocational Education Medium Term Budget MTBF WBM Water Bound Macadam Framework Medium Term Expenditure MTEF WPI Wholesale Price Index Framework Medium Term Fiscal MTFF Framework

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1 Introduction

1.1 Program Background

The Punjab Development Finance Program (PDFP) supported by the Asian Development Bank (ADB) consists of a policy-based loan of USD 200 million and is presently being implemented since January 2015. This program seeks to facilitate implementation of a comprehensive fiscal consolidation program in the state of Punjab. Its logic hinges on the link between creating fiscal space as a means to augment and sustain development financing in the state and laying the groundwork for improvements in service delivery and development expenditures.

One of the key components of PDFP is rationalization of public expenditure in the state to support growth and human development. In this context, Medium Term Expenditure Framework (MTEF) can play an important role in strengthening budget and expenditure management through better utilization of scarce fiscal resources in line with Government of Punjab’s priorities. Well designed and successfully implemented MTEF for a state’s administrative department is expected to essentially improve the allocative and technical efficiency of departmental spending.

At the outset, it may be noted that an Action Plan for MTEF introduction was prepared during the ADB PPTA assignment (2014). To take its implementation further, a phased approach for MTEF has been adopted. Accordingly, under this Technical Assistance (TA) Program, preparation of gender-responsive MTEFs for four pilot departments of Government of Punjab (GoP) has been envisaged as one of the outputs. In fact, it constitutes one of the third tranche conditions which read as:

“Gender-responsive MTEFs for health, education, power, & public works departments, which are consistent with MTFF, finalized & approved by Finance Department, & budget allocations for these departments made for FY2016 based on MTEFs”

Accordingly, the departments for which MTEFs have been prepared are:

. Department of Health and Family Welfare (DoH&FW) . School Education Department (SED) . Public Works Department (PWD), and . Power Department.

1.2 Context of this report

This report comprises Volume II of the Final Report being submitted under the TA assignment. Volume II captures the MTEFs prepared for the above mentioned four departments of Government of Punjab (GoP). MTEFs were developed in discussion with the various officials of the said departments, Department of Finance and Department of Planning which are the key stakeholders responsible for the success of the implementation of the framework. The MTEF projections prepared for the departments for the year FY2016-17 cover the medium term period of three fiscal years, i.e. budget year of 2016-17 and two outer years of 2017-18 and 2018-19.

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In this context, it may kindly be noted that expenditure incurred by other departments and institutions in the concerned sectors (i.e. health, education, public works and energy) apart from the said four departments has not been projected and MTEFs have been prepared at departmental level. The content of this report on MTEFs, consolidated for all four departments, is organized as follows:

 Chapter 1 (this chapter) presents a brief background of the program and explains the context of this report

 Chapter 2 briefs the MTEF concept and explains the methodology adopted in its preparation

 Chapter 3 presents the MTEF for the Department of Health & Family Welfare (DoH&FW)

 Chapter 0 presents the MTEF for the School Education Department (SED)

 Chapter 5 presents the MTEF for the Public Works Department (PWD)

 Chapter 6 presents the MTEF for the Power Department, and

 Annexures 1 to 3 present department-specific ‘ Key Performance Indicators- Definition, Definition of budget heads and List of Officials Met respectively.

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2 MTEF Concept & Methodology

2.1 Concept

Medium Term Expenditure Framework (MTEF) is a public expenditure planning exercise that sets out future budget requirements for existing services, and accordingly assesses resource implications of future policy changes. MTEF is considered as a tool designed to link planning, which has a medium to long term outlook with the annual budget exercise of governments, thereby linking budgetary expenditures more systematically with desired socio-economic goals. This helps in establishing linkages between policy, planning and budgeting over a medium-term which usually spans a period of 3 to 5 years. This framework enables the government to allocate budgetary resources to programs, activities, and projects that promote the strategic priorities of the national/ sub-national governments. As a concept, MTEF was pioneered by Australia in early 1980s with launching of “Forward Estimates” System which was followed by countries of Denmark, New Zealand, Netherlands and Norway adopting the same in early 1990s.

In the context of an administrative department of a state government in India, MTEF bridges the crucial gap between long-term State Five-Year Plan (along with operational annual plans) and annual departmental budgeting exercise by focusing more on result-oriented public expenditure as explained subsequently.

A long-term plan giving direction for a particular development pattern of the sector/ sub-sector in future provides inputs to the development of department MTEF. This is already in practice in the guise of the state’s Five-Year Plan (FYP)1. Keeping in view the priorities and stated government goals/ objectives in the FYP, the MTEF provides the overall framework guiding the budgetary allocations towards implementing initiatives/ measures towards attaining those objectives/ goals over the medium-term. In the annual budget preparation exercise, the concerned departments then prepare their annual budget requests premised on the estimates of the first year of their rolling MTEFs as the baseline. By this way, MTEF serves as a bridge between the long-term objectives for the sector and departmental annual budgeting exercise and ensure that resources are channeled to realize defined objectives in a targeted manner.

Five-Year Plan with Sustainable National/State allocation/ targets Annual Budgeting Development Development for Development at Departmental Goals Priorities Heads (sectoral) Level

Medium Term Fiscal Framework + Medium Term Expenditure Framework

1 State’s Five-Year Plan (FYP) indicates the state’s objectives that are aligned with national level objectives over a fixed five-year term and specifies sectoral targets to be achieved. Its formulation used to be coordinated by the state planning department in conjunction with the central planning authority, Planning Commission of India. However, with the abolishment of Planning Commission, the Five-Year planning exercise has ceased in India from FY 2017-18 onwards. These linkages in future would now need to be aligned with the Vision, Perspective Plan and Action Plan for the State (consistent with SDGs 2030) which are under finalization at the level of State Government. Page 12 of 153

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2.2 MTEF Preparation Methodology

MTEF has been prepared for a medium term of three years, which includes the budget year as the first year, and then estimates for the next two years. The years following the budget year are referred to as the outer years of the three-year period of MTEF and the estimates for these years are technically called “forward estimates”. An overview of the three broad processes followed under MTEF preparation is presented below (schematic diagram is presented on next page):

A. Top-Down Budgeting entailing estimation of likely availability of finances over medium term. This involves factoring in the overall macro-fiscal objectives of the state into consideration.

B. Bottom-Up Budgeting entailing estimation of costs of government policy interventions in two steps:

1. ‘Baseline Budget’ or ‘Trend Scenario’: This entails estimation of expenditure for maintaining current/ baseline level of performance in service delivery by an administrative department.

2. ‘Above the Baseline Budget’ or ‘Costed Reform Interventions’: Based on the assessment taken in the sector involving review of schemes, issues identified in institutional delivery of the department, and performance gaps assessed in results of the department with other progressive states and national average / norms, appropriate corrective actions and reform strategies are developed and costed to achieve medium term strategic objectives and goals of the Department.

C. Reconciliation and Re-prioritization: This involves matching of estimated expenditure requirements under bottom-up budgeting with anticipated resource availability, and if the resource constraint is binding, then suggesting prioritization of expenditure.

The detailed methodology followed under each of three processes is as follows:

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A. TOP-DOWN BUDGETING: Estimation of Resource Envelope

Estimation of MTEF Resource Envelope at Departmental Level: 1. Affordable resource envelope (RE) for state total expenditure (consistent with MTFF- FRBMA) 2. Affordable RE for concerned sectoral plan expenditure from FYP (historical share) 3. Departmental RE for total expenditure (after projecting non-plan expenditure & estimated resources available from Center on historical trend basis)

C. Reconciliation C. Reprioritization

3. Reform Scenario: Costing of identified interventions & adding to baseline scenario MTEF

2. Reform Scenario: Identification of interventions through fours sources as: (a) construction of logframe, (b) measuring physical performance, (c) scheme review, (d) institutional review

1. Baseline scenario MTEF: Projections based on historical growth trend or on already approved future allocations

B. BOTTOM-UP BUDGETING: Prioritized, Targeted Expenditure Requirements

2.2.1 Top-Down Budgeting Top-Down budgeting involves estimating ‘Resource Envelope’ for a government department which involves projecting the likely availability of resources in the future within which the department is expected to fit in its expenditures. This helps the department in better allocation/ prioritization of resources available and their optimal utilization among its various schemes of activities owing to knowledge of their multi-year availability. Hence, the department is expected to be more ‘resource conscious’ while preparing and executing the budget.

A three-step methodology is adopted to arrive at estimation of departmental resource envelope:

Step I: Estimating fiscal policy resource envelope for state total expenditure: This step involves projection of affordable resource envelope available for state total expenditure for the next 3 years consistent with its fiscal policy and discipline. This total state expenditure envelope is arrived by adding: (i) Total Revenue Receipts, (ii) Non-debt Capital Receipts and (iii) Fiscal Deficit (Net

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Debt Receipts) consistent with state’s Medium Term Fiscal Framework (MTFF) contained in its Fiscal Responsibility and Budget Management Act (FRBMA), 2004 with amendments thereof.

Step II: Estimating sectoral state plan resource envelope available to State: This step involves projection of total state plan expenditure estimates in the concerned sector for next 3 years consistent with state’s explicit sectoral priorities captured in its long-term planning exercise. Estimate of resources available for state plan schemes for the sector (11 sectors categorised as per five-year planning exercise) are arrived at using the following sub-steps:

(i) Affordable resource envelope for state plan expenditure: Past share of state plan spending in state’s total spending is calculated from planning documents of the state like the Five-Year Plan/ recent most State Annual Plan. This gives an estimation of plan component of state’s total spending and applied on projections for future years.

(ii) Affordable resource envelope for concerned sectoral plan expenditure: State plan spending includes expenditure under both state plan schemes and of assistance provided by the Center to State plan through Centrally Sponsored Schemes (CSS). Hence, to arrive at the sectoral resource envelope available for state plan schemes, past share of sector plan spending in total state plan spending is arrived at and applied for future projections.

Step III: Estimating MTEF resource envelope for the department: This stage involves estimating total on-budget resources available for departmental expenditure during the 3-year of MTEF period. After estimating the past share of departmental spending in the concerned sector, resource availability from Center for the departmental schemes and non-plan expenditure are projected based on historical trend.

2.2.2 Bottom Up Budgeting Bottom-up budgeting under MTEF involves estimation of expenditure requirements to sustain current level of performance in service delivery under Trend Scenario, and then estimating the additional cost required to achieve the desired targets through suggested interventions. Methodology followed has been elucidated in the following sub-sections:

2.2.2.1 Estimating expenditure in Trend Scenario A trend estimate has been built for the medium term on the basis of past expenditure by the department. Projections are made at detailed head2 level for all schemes. These are done on the following bases:

 Projections for schemes with pre-approved allocations is done based on utilization of the allocated budget observed in the past: Average utilization trend in the past 5 years is applied on the pre- approved allocation in future to arrive at the expenditure projections during the MTEF period

 Projections for detailed heads that have known bases: Salary/ pension payments are based on pay commission reports, and office expenses are projected using on inflation growth rate

 Projections for all other detailed heads are done based on their past trend growth rate from 2008- 09/ 2012-13 to 2014-15 RE

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 Projections for detailed heads with erratic or negative or unreasonable levels of past trends are based on trend observed in overall departmental plan expenditure, or non-plan expenditure trend as applicable. Thus, expenditure projections based on trend indicates the expenditure requirement that need to be incurred for continuation of the current schemes and sustain current level of performance indicators in service delivery at the historical rate.

2.2.2.2 Estimating expenditure for identified Reform Interventions Bottom-up projection of expenditure for suggested reform interventions involves two broad steps:  Step 1: Identification of issues and gaps in service delivery through four sources: (i) One-time preparation of a logical framework (log-frame) for all schemes level with annual update; (ii) Benchmarking analysis on Performance Indicators (PIs); (iii) Own past performance analysis; and (iv) Institutional review  Step 2: Suggesting reform interventions and estimating the associated cost implications

Step I: Identification of issues and gaps in service delivery:

This step is accomplished through following four sources/ analysis:

A. Construction of a logical framework This exercise is the most critical part of MTEF since it provides the needed clarity in terms of the way the departmental activities are geared towards achieving the overall welfare goal of the government. Below is illustrated as instances for the Departmental of Health & Family Welfare (DoH&FW):

Overall goal of the Department is poverty reduction and enhanced human capital by increased health attendance.

(i) Establishing the results chain: To begin with, ‘Scheme Outputs’ are specified/ defined for all schemes and programmes that are presently running under the DoH&FW and are expected to continue during 2016-19. These outputs are then mapped to the concerned ‘Objective of the department’ to which they contribute achieving. Results of achievement of departmental objectives have been termed as ‘departmental outcome’. Outcomes of all concerned departments then contribute to attainment of long-term sectoral goal of the government which is provision of affordable, accessible, sustainable, high quality essential health care for all in 5 years with a special focus on the poor, mother, child and elderly, and those living in underserved areas3. All such activities are then geared for the overall societal goal pursued by the government, viz. poverty reduction and enhanced human capital by increased health attendance.

Schemes outputs, department objectives/ outcomes, and long-term government goals (sectoral and societal) are put down in a format that shows the logical connections between them as shown in Table 1 below.

3 Extracted from DoH&FW website: http://www.wbhealth.gov.in/inner.asp?pass_file_id=20 Page 16 of 153

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Table 1: Components involved in construction of logical framework

 The End Result – Sustainable & Inclusive growth, i.e. achieving triple bottomline [3Ps - People, Planet & Profits] Societal Goal E.g. Poverty reduction, enhanced human capital by increased health attendance

 A higher-level identified situation sought to be attained by the government in the concerned sector Sectoral Goal E.g. Provision of affordable, accessible, sustainable, high quality essential health care for all in 5 years

 What is to be achieved by the department through various Department objectives / schemes/ projects outcome E.g. Universal coverage of routine immunization; reduced burden of communicable diseases; improve geographical access to public healthcare

 Specific, direct deliverables of schemes/ projects E.g. Construction of health facilities; Control of diseases- blindness, leprosy, Scheme Output malaria, filaria, tuberculosis, iodine deficiency disorders, and other vector borne diseases

 Activities undertaken by the department to deliver its outputs E.g. Special Programme under NRHM; Construction of SCs, PHCs in Department Scheme addition to the SDHs and DHs under the recommendation of 13th Finance Commission

It may be noted in the context that one-to-one relation is not necessary between the schemes and objectives of the department- multiple schemes may contribute to a single objective on one hand and one scheme may also contribute to multiple objectives on the other hand.

Thus, the above exercise helps in identifying scope for:

 Convergence of those schemes/ programmes which have similar objectives, or

 Group certain set of schemes with dissimilar objectives but catering to a select area in the sector- for better targeting and administrative efficiency

 Focus areas not targeted in a structured / adequate manner Data sources:  Departmental objectives are sourced from FYP/ Annual Reports of the department/ MDGs

 Scheme outputs are taken from detailed study of respective scheme/ programme guidelines (ii) Identification of performance indicators (PIs): After establishing the results chain for each scheme/ intervention of the department, performance indicators are identified with an aim

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to infuse the result-orientation in MTEF. A performance indicator is an element of information or data that helps measure whether progress or change has occurred. The performance assessed on these indicators provides the evidence base for updating MTEF projections in the next cycle.

Performance indicators for each scheme output and departmental objective (outcome) are identified. It may be noted in this context that there can be a number of possible PIs for a particular scheme output or departmental objective in this logframe activity. Following criteria may be kept in view while selecting PIs:

 Data related to the PI is available in a timely manner and at reasonable cost;

 PI should preferably be ‘quantitative’ and ‘relative’, like expressed in percentage or proportion. On qualitative aspects or those which are not readily measurable, such as involving perceptions or opinions, attempts should be made to quantify them, like percentage of people subscribing to a particular opinion;

 PI should be ‘monitorable’ in the sense that it should lend itself to being tracked with respect to inputs, activities, outputs, outcomes, and impacts continually so that for a particular intervention, it can be decided when and how to influence them. Close monitoring of targets provide timely inputs for decision making and policy changes and easier impact evaluation.

B. Measuring physical progress on Performance Indicators (PIs): This involves assessment of performance and gap - An assessment of the status of the department’s performance on PIs at both scheme output level and outcome (results of department objective) level is undertaken as compared to the national average and other progressive states or norms. Key steps are as follows:  Record baseline values of PIs for Outcome/ Outputs (first time)  Undertake temporal analysis  Perform comparative assessment for deriving targets: o Intra-state: District/Block wise o Inter-states: Comparable states o All India National averages  Assess gap versus the pre-determined norms at state/ national level

C. Scheme Review: This involves following steps:  Undertake past expenditure analysis  Undertake deeper examination of select schemes (i.e. scope for improving design & implementation) based on following criteria: o Schemes allocated majority of expenditure (Pareto Principle Rule) o Areas where significant performance gap is found

It may be noted in the context that scheme reviews and/ or evaluations are outside the purview of MTEF exercise, such exercises can though help inform MTEF exercise.

D. Institutional Review: A review of the department structure, functioning and processes is undertaken to study effectiveness of service delivery in the department and identify areas of improvement. Issues faced in the discharge of departmental functions and robustness of the processes are identified mainly after discussions with the key department officials. Step II: Suggesting reform interventions and estimating the associated cost implications

Once the interventions have been identified, the next step is to estimate the cost of undertaking these interventions. Costing of identified interventions to achieve targeted performance level will give an Page 18 of 153

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estimate of the additional funding required over and above trend scenario expenditure projections. The method for costing interventions can be undertaken as per the following steps:

(i) Identify inputs of an intervention

(ii) Estimate per unit input cost: For costing inputs of an intervention, the department can refer to various sources: a. Costing norms available at the national level b. Costing norms from states which have already implemented such interventions c. Costing inputs using existing scheme guidelines (iii) Inflation indexation of cost projections: Wherever required, the cost projections should be inflation indexed

(iv) For arriving at the total cost of an intervention, per unit cost of input has to be multiplied by the total inputs that the department wants to provide, i.e.

Total cost of an intervention = (Per unit input cost) x (Total inputs to be provided)

Post costing of intervention, schemes and the respective head of accounts under which the expenditure is to be made are identified by mapping back the PI targeted under each intervention to the schemes via the log-frame.

2.2.3 Reconciliation & Reprioritisation 2.2.3.1 Reconciling expenditure requirements with resources This entails reconciliation of projected ‘bottom up’ expenditure requirements (baseline budget added to costed reform interventions) with projected ‘top down’ resource availability to the department. MTEF deficit (+)/ surplus (-)before re-prioritisation exercise is then calculated by the mismatch between the bottom-up and top-down estimates.

2.2.3.2 Reprioritization In case of surplus, additional interventions are proposed to utilize the excess. In case of deficit, the department may (i) look for getting more plan funds from GoI schemes (newly announced/ existing GoI scheme), (ii) garner additional resources available through say, Finance Commission (FC) grants, (iii) identify savings in expenditure through scrutiny of existing spending to identify potential efficiency gains, or (iv) identify low priority programs where allocation can be reduced. Under constraining resource envelope and after exhaustion of all possible sources of savings, there may still be occasions wherein interventions can only be afforded through cuts in other department budget items/ schemes, i.e. those heads of expenditure which are not related to identified interventions. However, given that state’s share in GoI schemes and salaries component of department expenditure is committed; hence resources have to be identified from rest of the sources, viz. non salary component of non-plan expenditure, and budget heads under plan expenditure not related to identified interventions and priority areas. For the purpose, the logframe may need to be revisited with respect to the schemes to do reprioritization. Schemes which prove to be relatively inefficient in attainment of the outputs and objectives of department can experience cuts/ lower budget allocation. Also, those that contribute to the bottom ten percent of total expenditure of the department can be chosen for this purpose.

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2.2.4 Update of MTEF exercise The three-year departmental MTEF is updated by annually rolling over into the next (overlapping) three- year period. When year 2 comes along, it becomes the first year (year 1) in the next three-year period; year 3 becomes the second year (year 2) and year 4 is added as the third year (year 3). In sum, at any point in time, there are always three years for which MTEFs must be prepared or updated- an actual (proposed) budget for the first year and MTEF estimates for the second year and third years.

The way MTEF has been prepared as explained above provides evidence-based feedback for subsequent rounds of budgeting and policy decision-making. While measuring performance, the inventory of reasons explaining the gaps observed, say under- spending or cost and time overruns, will accordingly inform the target setting and budgeting when the 3-year MTEF will be rolled over in the next year. However, non- attainment of performance need not invariably lead to lower outlay and attainment to higher outlay in the subsequent round. For the purpose, while the MIS reports will provide the some useful insights, however it cannot capture the feedback from observed behaviour and inferences which can only come from officials made accountable for the outcomes for which an inventory of reasons/ remarks shall be maintained.

For the purpose, preparation of following ‘matrix’ is suggested to be developed for measuring performance for monitoring and accountability.

Table 2: Matrix for Data Collection

Indicator Level of Indicator Scheme* Data Sources Data Collection Method Frequency of Collection Responsib forility Collection Accountab forility outcome

(Outcome or (Files, (Database/ Surveys/ (Monthly/ Quarterly/ (Officials) (Officials) Scheme Output) Documents) Interviews) Annually)

*Scheme needs to be specified only if the indicator under consideration pertains to scheme level, i.e. output level

2.2.5 MTEF and Public Expenditure Management in budgeting Thus, the way MTEF has been designed evidently contributes in achieving one of the critical objectives of Public Expenditure Management (PEM), namely “enhanced allocation efficiency”. This is ensured through the following ways:

 Allocation is aligned to the macro-fiscal objectives of the State and targets committed under FRBMA through estimation of the resource envelope

 Allocations are clearly linked with the long term sectoral priorities (both inter and intra sectoral resource allocation) of the State envisaged under its Five Year Plan and Annual Plans

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 Allocation estimates are updated annually on a rolling basis based on actual performance on physical indicators through preparation of logframe and performance tracking

 Allocations are made by making explicit recognition of the medium term perspective in implementation of schemes/ programmes in deciding allocations.

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3 MTEF for Department of Health and Family Welfare

This chapter presents the MTEF prepared for the Department of Health and Family Welfare (DoH&FW), Govt. of Punjab for the FY2016-17, thus also containing forward estimates for FY2017-18 and FY2018-19. 3.1 Long-term sector strategy & departmental objectives

The DoH&FW has been vested with the responsibility of maintaining and developing the health care system in the state of Punjab. Management of public health, sanitation and hospitals are the exclusive responsibilities of the State. Healthcare service delivery in the state, provided by DoH&FW, is categorized into primary, secondary and tertiary care services.

Under primary healthcare, in rural areas, the first point of contact between the villagers and the health workers is the Sub-Center (SC). Healthcare system in the villages is four-tiered, wherein one Secondary Health Care (SHCs)/Rural Dispensaries caters to two SCs. In turn, one Primary Health Care (PHC) caters to three SHCs. And then again in turn, one Community Health Center (CHC) caters to three PHCs. Under Alternative Health Care Delivery System4, 1187 subsidiary health centers (rural dispensaries) have been transferred to the Department of Rural Development and Panchayats. Urban family planning centers provide family planning services to the urban population.

The hospitals at Sub-Divisional level and District Hospitals serve as secondary level of health care system. They give support to the services being provided in the Primary Health Care System and together form a comprehensive district-based health care system.

Tertiary level health care services are provided in the State by the specialized hospitals and hospitals attached to State Medical Colleges. These institutions besides providing support to the secondary level health care system are expected to carry out research and manpower development for the health services of the State.

4 In view of the 73rd Amendment in the Constitution of India, the Department of Health & Family Welfare has devised an alternative health delivery system for the Subsidiary Health Centers i.e. Rural Dispensaries in the State of Punjab. The State Council of Ministers has approved that the health services in the 1310 Subsidiary Health Centers (SHCs) be provided through Zila Parishads (PRIs) by engaging doctors on service contract basis. With such arrangements, these institutions i.e. Rural Dispensaries will be more accountable to people through elected bodies of Zila Parishads, Panchayat Samities and Panchayats. Page 22 of 153

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Figure 1: Functional classification of healthcare service in the state

Department of Health & Family Welfare

Primary Healthcare Secondary Healthcare Tertiary Healthcare

Rural Urban

Sub Center (SC) Urban Family Sub State Medical Planning Divisional College and Secondary Health Hospital Hospital Center (SHC) Center

Primary Health

Center (PHC) District Special

Hospital Hospital Community Health

Center (CHC)

Source: Department of Health & Family Welfare, Government of Punjab

MTEF has been prepared for the DoH&FW for three years which includes the budget year as the first year (2016-17), and then budget estimates for the two outer years, viz. 2017-18 and 2018-19. 2018-19 and 2017-18 are referred to as the outer years of the three-year period and the budget estimates for these years are technically called “forward estimates”.

MTEF is prepared keeping in view the overall long-term strategies adopted by the GoP for the concerned planning sector, i.e. ‘Social Services’ as captured in its Five-Year Planning exercise and the Vision of the Department. In this context, it may be useful to first present an overview of the sector and the DoH&FW.

An analysis of past spending in the three recent most Five-Year Plans (FYPs) clearly suggests an ever- increasing focus being laid by the GoP on the Social Services sector.

Table 3: Allocation under Social Services sector out of total allocated outlay under FYP

FYP Allocation (INR millions) Share of Out of Social Services Social Services Total Outlay Social Medical and public health Services in total outlay 12th FYP (2012-17) 359,440 921,000 40.50% N/A 11th FYP (2007-12) 99,020 289,230 34.23% 4.10% 10th FYP (2002-07) 48,583 186,570 26.04% 10.92% Source: Draft 12th FYP, 11th and 10th Five-Year Plans, GoP

As can be seen from above table,

 Compositional share of the Social Services sector has increased by more than 50% since the 10th FYP and stands at 41.69% in the 12th FYP.

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 Within Social Services sector, share of medical and public health decreased from 10.92% in 10th FYP to 4.10% in 11th FYP.

In recent years however, the share of medical and public heath within the Social Services sector has seen an upward trend during 2008-09 to 2014-15. The said share as per Annual Plans, has doubled from 6.09% in 2008-09 to 14.28% in 2014-15 as evident from below table. This shows the commitment of the government towards health care services.

Table 4: Share of approved outlay under social services across different years

Social Services 2010-11 2011-12 2012-13 2013-14 2014-15 Medical and Public Health 6.18% 8.85% 7.37% 8.68% 14.28% Other Social Services 93.82% 91.15% 92.63% 91.32% 85.72% Source: Annual Plans, GoP

Further, in terms of utilization, actual expenditure as a percentage of approved outlay under Social Services sector declined over the period 2010-11 to 2013-14 from 91.2% in 2010-11 to 61.6% in 2013-14. However, in medical and public health, utilization increased from 58.4% in 2010-11 to 60.4% in 2013-14.

Table 5: Actual utilization as % of approved outlay under Annual Plans in Health (%)

Sector 2010-11 2011-12 2012-13 2013-14 Medical and Public Health 58.4% 42.7% 82.8% 60.4% Other Social Services 93.4% 72.4% 49.4% 61.7% TOTAL 91.2% 69.7% 51.8% 61.6% Source: Annual Plans, GoP

The Vision5 of the DoH&FW of Government of Punjab is to:

(i) provide accessible, affordable and quality health care to the population with special focus on vulnerable sections living in rural areas (ii) improve the health of women and children in Punjab (iii) improve (reduce) infant mortality rate (IMR), maternal mortality ratio (MMR), maintain the total fertility rate (TFR) level.

In order to achieve its Vision, the DoH&FW focuses on the following areas6:

General areas:  Primary health care needs focused attention  Focus on initiatives to improve the maternal child health, adolescent health, family welfare program, sex ratio  Human resource development initiatives  Public health planning and financing  Strengthening services like drugs, ambulance, equipment and infrastructural development  Community involvement and patient feedback and grievance redressal

5 Source: http://www.pbnrhm.org/docs/pip_2007-08.pdf, http://pbhealth.gov.in/MCH%20ACTION%20PLAN%202014-%2017%20(1).pdf 6 Program Implementation Plans 2013-14, 2014-15; NRHM state action plan 2010-11, DoH&FW, GoP Page 24 of 153

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 Strengthening data validity, supportive supervision, quality assurance and surveillance  Coordination and regulation involving PPP and NGOs etc.  Set and achieve basic service standards for public sector health care  Reduce out-of-pocket expenditure for patients

Maternal and Child Health:  Operationalizing Delivery Points - Level 3 delivery points functioning as CEmOC facilities, Level 2 delivery points functioning as BEmOC facilities  All the delivery points should have a functional New-born Care Corner consisting of essential equipment and staff trained in NSSK  Special New-born care Units (SNCU) for care of the sick new-born should be established in all Medical Colleges and District Hospitals  Ensuring free entitlements under Janani Shishu Suraksha Karyakaram (JSSK)  Centralized Call Center and Assured Referral Transport  Availability of essential Drug List  Capacity Building  Tracking severe anaemia

Disease control:  Immunization to be proactive enough to make children resistant of any abnormality and disease attack  Awareness campaign to discourage consumption of tobacco and cigarettes  Enforcement activities by challan and raid conducted at doubtful places to capture illegal drugs

Medical Education and Research:  Expansion of tertiary health care  Use of medical colleges as resource centers for national health programs  Strengthening/ revamping of Auxiliary Nursing Midwifery (ANM) / General Nursing & Midwifery (GNM) training centers and paramedical institutions

Family Planning  Strengthening spacing methods  Emphasis on post-partum family planning services  Strengthening sterilization service delivery  Development of Behaviour Change Communication (BCC)/ Information Education Communication (IEC) tools highlighting benefits of Family Planning specially on spacing methods.

3.2 Top-Down Budgeting- Estimation of Resource Envelope

Estimating ‘Resource Envelope’ involves projecting the likely availability of resources in the future within which the department is expected to fit in its expenditures. The methodology has already been discussed in Chapter 2. The analysis and results are discussed here for the DoH&FW.

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3.2.1 Step I: Fiscal Policy Resource Ceiling for State Total Expenditure Projections for all three sources of government receipts viz. (1) revenue receipts, (2) non-debt capital receipts and (3) fiscal deficit (net of debt receipts) have been taken from the Medium Term Fiscal Framework (MTFF) prepared for FY 2016 to FY 2018.

Table 6: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (in INR million)

S. No. Item 2014-15 Basis 2015-16 2016-17 2017-18 2018-19 Expected* Expected* (P**) (P) (P) 1 Total Revenue MTFF 390,230 456,480 494,084 535,190 580,154 Receipts 2 Non-debt MTFF 1,184 1,248 1,311 1,376 1,445 Capital Receipts 3 Fiscal Deficit MTFF (Net Debt 109,165 121,077 128,835 124,834 128,633 Receipts) 4 Fiscal Policy Resource Ceiling for 500,579 578,806 624,230 661,401 710,232 State Total Expenditure (1 + 2 + 3) * Base year for MTFF projections is expected estimated for FY 2015-16 (data as provided by the Department of Finance, Govt. of Punjab) for all except for two revenue items of: (a) state lottery, (b) recovery of loans & advances, and three expenditure items of: (c) salary, (d) pension and (e) loans and advances given by State Government for which the base year is expected estimates for FY 2014-15. ** P within brackets, i.e. (P) in this report denotes the projections made

3.2.2 Step II: Sectoral State Plan Resource Ceiling Resource Ceiling for State Plan in the concerned Social Services Sector has been arrived at in the following way7:

5. Resource ceiling for ‘Total Plan’ expenditure in the state is estimated for MTEF projections period, FY 2016-18 by extrapolating the historical share of 22.61% of total plan expenditure sourced from State’s Annual Plan in the values of S.No.4 of above table.

6. Resource ceiling for Health Sub-Sector in Total Plan expenditure resource ceiling during 2016-18 is estimated by extrapolating its historical share of 2.87% of 12th five-year program (2012-17) in the projected figure in S. No. 6.

7 Ideally, average historical share for at least 3 years should be considered to take care of any outliers/ spikes. However, due to unavailability of detailed data from Annual Plans of the State, the historical share has been considered for only one year 2014-15 expected in this exercise. Page 26 of 153

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Table 7: Estimation of Resource Ceiling for State Plan in Health (in INR millions)

2014-15 S. 2015-16 2016-17 2017-18 2018-19 Item (Annual Basis No. (P) (P) (P) (P) Plan, AP) Affordable Resource Envelope Historical 5 for State Plan Expenditure 113,180 share (AP)- 130,867 141,137 149,541 160,582 (proportion of 4) 22.61% Affordable Resource Envelope Historical 6 for Health Sub-Sector 9,867 share (AP)- 3,755 4,050 4,291 4,608 (proportion of 5) 2.87%

3.2.3 Step III: Departmental MTEF Plan Budget Resource Ceiling 7. Projections for State plan schemes in the DoH&FW is estimated during FY 2016-18 by extrapolating its historical share (2014-15 RE) of 14.34% in the values of affordable resource envelope for general education sub-sector as calculated in S.No.6 above.

8. Resource availability from center (CS+CSS) for DoH&FW is then extrapolated on its historical share of 69.14% (2014-15 RE) (proportion of 6).

9. Non-plan resource ceiling for the department is projected based on the historical trend growth of budget estimates for non-plan expenditure for the period 2012-13 to 2014-15 (RE).

Total resource ceiling for the department is then calculated by summing up the estimated resource availability of the department for state plan schemes (7), Resource availability from center (CS/CSS) (8) and non-plan expenditure (9).

The total likely resource availability for DoH&FW for the next three years is presented in Table 8.

Table 8: Estimation of MTEF Budget Resource Ceiling for DoH&FW (in INR million)

S. 2014-15 2015-16 2016-17 2017-18 2018-19 Item 2013-14 Basis No. (RE) (P) (P) (P) (P)

Affordable RE for Historical State Plan share in 7 Expenditure for 968 1,415 538 581 615 661 2014-15: DoH&FW 14.34% (proportion of 6) Projected Resource Historical Availability from share in 8 1,615 6,822 2,596 2,800 2,967 3,186 Center for 2014-15: DoH&FW (CS/CSS) 69.14%% Projected Non Plan 9 14,044 17,140 21.09% 20,754 25,131 30,431 36,848 Expenditure MTEF Resource Envelope for 10 16,627 25,377 23,889 28,512 34,013 40,695 DoH&FW (7+8+9)

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3.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario

The first step under bottom-up budgeting of MTEF is estimating the expenditure requirements of the DoH&FW based on the trend observed in the past years. Expenditure projections based on trend indicates the expenditure requirement that need to be incurred for continuation of the current schemes and sustain current level of performance indicators in service delivery at the historical rate.

3.3.1 Basis used for projections Trend scenario projections for the schemes under DoH&FW for the next three years, i.e. 2016-17 to 2018- 19 using 2014-15 (RE) as the base year have been done as follows:

3.3.1.1 Schemes projected at detailed head level  Salaries and Wages (SOE- 01 and 02): Projections for salaries and wages have been done in accordance with the state’s average annual growth in salaries over a period of 12 years. The average growth rate comes out to be 12%.

 SOE- 11, 12, 13, 14, 21, 23, 24, 25, 26, 28, 34, 50, 51, 52, 91, 92, 93 and 94: WPI for all commodities for series 2004-05 for 2014-15 with respect to 2013-14 is 2.03%. Expenditure under the SOEs mentioned above are projected by applying the inflation rate on previous year’s allocation.

 All other Detailed Heads:

o Except for above, all other detailed heads under each scheme have been projected based on their own historical trend growth rates observed during 2010-11 to 2014-15 (RE).

o In cases where the trend growth rate is found to be negative or erratic or too high/ low, the projections have been made based on the trend growth rates observed in the expenditure category of the department to which they belong, i.e. plan or non-plan. In certain cases rule of thumb rate of growth is assumed, which is 10%. The trend growth rates, hence, taken are shown in below table:

Table 9: Trend growth rates used in baseline projections, DoH&FW

Trend growth rate for the period of 2010- Heads 11 to 2014-15 (RE)

Trend Growth rate (Plan) 29% Trend Growth rate (Non-Plan) 26% Total Departmental Expenditure Growth Rate 27% Rule of thumb Growth Rate 10%

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3.3.2 Expenditure projections under Trend Scenario The below tables present the MTEF projections for DoH&FW at scheme level for the period 2016-17 to 2018-19 based on the assumptions specified in Section 3.3.1.1. The tables also contain the 2015-16 (BE) figures. The schemes for which the department has not allotted fund for 2014-15 (RE) or 2015-16 (BE) are excluded from the list.

Below Table 10 presents the trend projections for all three categories of plan schemes of DH&FW, viz. center sector (CS), state plan (SP) & centrally sponsored schemes (CSS).

Table 10: MTEF Projections for plan schemes- Trend Scenario8 (in INR millions)

Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CS 2210 2 101 13 3.1 2.9 3.1 2.9 3 3 CS 2210 2 101 Specialty Clinics of ISM 21 0 0 0 0 0 0 CS 2210 2 101 (Ayurveda) in District Allopathy 27 1 0.9 1.1 1 1.1 1.2 CS 2210 2 101 Hospitals 52 0 0 0 0 0 0 CS 2210 2 789 13 1.5 1.8 1.5 1.8 1.9 1.9 CS 2211 0 1 1 128.9 43.8 144.4 49.1 54.9 61.5 CS 2211 0 1 11 0 0 0 0 0 0 CS 2211 0 1 13 0.2 0.2 0.2 0.2 0.2 0.2 CS 2211 0 1 21 0 0 0 0 0 0 CS 2211 0 1 50 0.1 0.1 0.1 0.1 0.1 0.1 CS 2211 0 1 91 0.3 0.5 0.3 0.5 0.5 0.5 Direction and Administration CS 2211 0 1 92 0 0.1 0 0.1 0.1 0.1 CS 2211 0 1 98 0 0 0 0 0 0 CS 2211 0 789 1 55.4 20.7 62.1 23.2 26 29.1 CS 2211 0 789 11 0 0 0 0 0 0 CS 2211 0 789 13 0 0 0 0 0 0 CS 2211 0 789 91 0.1 0.3 0.1 0.3 0.3 0.3 Establishment of new Trauma CS 2210 1 110 Centers (Jalandhar, Pathankot 31 0 60.7 0 66.8 73.5 80.8 and Khanna) CS 2210 6 101 National AIDS & STD Control 31 0 115.6 0 127.2 139.9 153.9

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CS 2210 6 101 36 244.8 136 269.3 149.6 164.6 181 CS 2210 6 789 31 0 54.4 0 59.8 65.8 72.4 CS 2210 6 789 36 115.2 64 126.7 70.4 77.4 85.2 CS 2210 1 110 1 1.8 1.1 2 1.2 1.3 1.5 CS 2210 1 110 31 0 0.5 0 0.6 0.6 0.7 National Iodine Deficiency CS 2210 1 110 36 0.6 0 0.7 0 0 0 Disorder Control Program CS 2210 1 789 31 0 0.3 0 0.3 0.3 0.3 CS 2210 1 789 36 0.8 0.5 0.8 0.6 0.6 0.7 CS 2210 6 101 31 5.6 13.6 6.2 15 16.5 18.1 CS 2210 6 101 36 36.2 27.2 39.8 29.9 32.9 36.2 National Program for Control of CS 2210 2 102 36 0 0 0 0 0 0 Blindness CS 2210 6 789 31 0 6.4 0 7 7.7 8.5 CS 2210 6 789 36 59.7 12.8 65.6 14.1 15.5 17 CS 2210 6 104 21 0 0 0 0 0 0 CS 2210 6 104 31 1.1 1 1.2 1.1 1.2 1.4 National Tobacco Control CS 2210 6 104 36 3.4 2 3.7 2.2 2.5 2.7 Program CS 2210 6 789 31 0.5 0.5 0.6 0.5 0.6 0.6 CS 2210 6 789 36 1.6 1 1.8 1.1 1.2 1.3 CS 2211 0 1 1 1.9 0.6 2.1 0.7 0.7 0.8 CS 2211 0 1 11 0 0 0 0 0 0 CS 2211 0 1 13 0 0 0 0 0 0 CS 2211 0 1 91 0 0.1 0 0.1 0.1 0.1 CS 2211 0 789 Revamping of Organisational 1 0.8 0.2 0.9 0.2 0.2 0.3 CS 2211 0 789 Services 11 0 0 0 0 0 0 CS 2211 0 789 13 0 0 0 0 0 0 CS 2211 0 789 21 0 0 0 0 0 0 CS 2211 0 789 34 0 0 0 0 0 0 CS 2211 0 789 91 0 0.1 0 0.1 0.1 0.1 CS 2211 0 102 1 91 35.5 101.9 39.8 44.5 49.9 CS 2211 0 102 11 0 0 0 0 0 0 CS 2211 0 102 13 0 0 0 0 0 0 CS 2211 0 102 21 0 0 0 0 0 0 Revamping of Organisational CS 2211 0 102 91 0.1 0.3 0.1 0.3 0.3 0.3 Services of Delivery System CS 2211 0 789 1 34.2 16.7 38.3 18.7 20.9 23.5 CS 2211 0 789 11 0 0 0 0 0 0 CS 2211 0 789 13 0 0 0 0 0 0 CS 2211 0 789 21 0 0 0 0 0 0

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CS 2211 0 789 91 0 0.2 0 0.2 0.2 0.2 CS 2211 0 101 1 979.7 407.4 1097.3 456.3 511 572.4 CS 2211 0 101 11 0 0 0 0 0 0 CS 2211 0 101 13 0 0 0 0 0 0 CS 2211 0 101 21 0 0 0 0 0 0 CS 2211 0 101 91 0.3 0.6 0.3 0.6 0.6 0.6 Rural Family Welfare Services CS 2211 0 789 1 419.9 191.6 470.3 214.6 240.3 269.2 (Funding of 2858 Sub-Centers) CS 2211 0 789 11 0 0 0 0 0 0 CS 2211 0 789 13 0 0 0 0 0 0 CS 2211 0 789 21 0 0 0 0 0 0 CS 2211 0 789 34 0 0 0 0 0 0 CS 2211 0 789 91 0.1 0.4 0.1 0.4 0.4 0.4 CS 2211 0 3 1 9.7 3.6 10.8 4 4.5 5.1 CS 2211 0 3 27 0 0 0 0 0 0 CS 2211 0 789 1 4.1 1.7 4.6 1.9 2.1 2.4 Strengthening of Training School CS 2211 0 789 11 0 0 0 0 0 0 buildings CS 2211 0 789 13 0 0 0 0 0 0 CS 2211 0 789 21 0 0 0 0 0 0 CS 2211 0 789 91 0 0 0 0 0 0 CS 2211 0 3 1 12.7 4.4 14.2 5 5.6 6.2 CS 2211 0 3 11 0 0 0 0 0 0 CS 2211 0 3 13 0 0 0 0 0 0 CS 2211 0 3 21 0 0 0 0 0 0 CS 2211 0 3 34 0 0 0 0 0 0 Training to MPW (Male) in CS 2211 0 3 91 0.2 0.5 0.2 0.5 0.5 0.5 Training schools at Mohali, CS 2211 0 789 1 5.5 2.1 6.2 2.4 2.7 3 Amritsar and Nabha CS 2211 0 789 11 0 0 0 0 0 0 CS 2211 0 789 13 0 0 0 0 0 0 CS 2211 0 789 21 0 0 0 0 0 0 CS 2211 0 789 34 0 0 0 0 0 0 CS 2211 0 789 91 0 0.2 0 0.2 0.2 0.2 CS 2211 0 3 1 19.2 6.1 21.5 6.8 7.6 8.6 CS 2211 0 3 Training to MPW(F) in Training 11 0 0 0 0 0 0 CS 2211 0 3 Schools at Gurdaspur, Sangrur, 13 0.1 0.2 0.1 0.2 0.2 0.2 CS 2211 0 3 Nangal, Hoshiarpur, Bhatinda 21 0 0 0 0 0 0 CS 2211 0 3 and Moga 34 0 0 0 0 0 0 CS 2211 0 3 91 0.2 0.5 0.2 0.5 0.5 0.5

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CS 2211 0 789 1 8.3 3.1 9.3 3.5 3.9 4.4 CS 2211 0 789 11 0 0 0 0 0 0 CS 2211 0 789 13 0 0.1 0 0.1 0.1 0.1 CS 2211 0 789 21 0 0 0 0 0 0 CS 2211 0 789 34 0 0 0 0 0 0 CS 2211 0 789 91 0 0 0 0 0 0 CS 2211 0 102 1 25.8 9.6 28.9 10.8 12.1 13.5 CS 2211 0 102 11 0 0 0 0 0 0 CS 2211 0 102 13 0 0 0 0 0 0 CS 2211 0 102 31 0 0 0 0 0 0 CS 2211 0 102 Urban Family Welfare Services 91 0.1 0.5 0.1 0.5 0.5 0.5 CS 2211 0 789 1 11 4.5 12.4 5 5.6 6.3 CS 2211 0 789 11 0 0 0 0 0 0 CS 2211 0 789 13 0 0 0 0 0 0 CS 2211 0 789 91 0.1 0.3 0.1 0.3 0.3 0.3 CS 2210 2 102 13 0 0 0 0 0 0 Establishment of specialized CS 2210 2 102 21 0 0 0 0 0 0 therapy center with hospitalized CS 2210 2 102 50 0 0 0 0 0 0 facilities for Homoeopathy CS 2210 2 102 52 0.3 0.3 0.3 0.3 0.3 0.3 CS 2210 2 102 13 0.2 0.2 0.2 0.2 0.2 0.2 CS 2210 2 102 21 0 0 0 0 0 0 Establishment of ISM & H wings CS 2210 2 102 27 0 0 0 0 0 0 in District Allopathy Hospitals CS 2210 2 102 50 0 0 0 0 0 0 CS 2210 2 102 52 1.6 1.6 1.7 1.7 1.7 1.7 CS 2210 2 102 Establishment of Specialty 13 0 0 0 0 0 0 CS 2210 2 102 Clinics/Treatment Centers of 21 0 0 0 0 0 0 CS 2210 2 102 ISM and H in Allopathy 27 0 0 0 0 0 0 CS 2210 2 102 Hospitals 52 0 0 0 0 0 0 CS Supply of Essential drugs of ISM 2210 2 102 21 0 0 0 0 0 0 and H SP 2210 2 101 1 1.1 1.3 1.2 1.4 1.5 1.7 SP 2210 2 101 13 0.1 0.1 0.1 0.1 0.1 0.1 Strengthening of DTL Patiala SP 2210 2 101 93 0.3 0.3 0.3 0.3 0.3 0.3 SP 2210 4 789 21 0 0 0 0 0 0 SP 2210 2 101 Strengthening of District 1 10 14.1 11.2 12.5 14 15.7 SP 2210 2 101 Headquarters staff in newly 11 0.1 0.1 0.1 0.1 0.1 0.1 SP 2210 2 101 created Districts. 13 0.8 0.4 0.8 0.8 0.8 0.8

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head SP 2210 2 101 21 0 0 0 0 0 0 SP 2210 4 101 50 0 0 0 0 0 0 SP 2210 2 101 52 0 0 0 0 0 0 SP 2210 2 101 91 0.2 0.2 0.2 0.2 0.2 0.2 SP 2210 2 101 92 0.2 0.2 0.2 0.2 0.2 0.2 SP 2210 2 101 93 0.1 0.1 0.1 0.1 0.1 0.1 SP 2210 2 789 1 3.8 5 4.2 4.7 5.3 5.9 SP 2210 1 1 Bhagat Puran Singh Medical 36 50 190 55 60.5 66.6 73.2 SP Insurance Scheme for poor 2210 1 789 36 0 310 0 341 375.1 412.6 people SP 2210 80 789 Creation of Cancer & Drug 36 161 320 177.1 194.8 214.3 235.7 SP 2210 80 800 addiction Treatment 36 539 680 592.9 652.2 717.4 789.1 SP 2210 80 800 Infrastructure 36 0 0 0 0 0 0 SP 4210 1 110 31 0 0 0 1100 1210 1331 Disaster and Risk Reduction SP 4210 1 110 35 0 0 0 0 0 0 Program in the State Hospitals SP 4210 1 110 52 0 0 0 0 0 0 SP Establishment of Primary Rural Rehabilitation and Drug De- 2210 80 800 36 0 500 0 550 605 665.5 Addiction Centers in the state (NABARD)(85:15) SP 2210 1 1 31 265.2 265.2 291.7 320.9 353 388.3 Implementation of Emergency SP 2210 1 789 31 124.8 124.8 137.3 151 166.1 182.7 Response Services in the State SP 2210 2 789 36 0 0 0 0 0 0 SP Operationalization of state 2210 1 1 Radiation Safety Agency in the 31 5 0 5.5 6.1 6.7 7.3 State SP 4210 1 110 35 0 0 0 0 0 0 SP 4210 1 110 Punjab Urban Health 36 0 0 0 0 0 0 SP 4210 1 110 Infrastructure (DHS- 0-0 53 0 0.1 0 7480 8228 9050.8 SP 4210 3 789 10,11,13,15 and 25) (Civil Works 0 0 0 0 0 0 0 SP 4210 1 789 + Equipment) (ACA 2011-12) 35 0 0 0 0 0 0 SP 4210 1 789 53 0 0 0 3520 3872 4259.2 SP 2210 1 1 21 0 0 0 0 0 0 SP 2210 1 1 36 250 170 275 302.5 332.8 366 Seed Corpus of Cancer Relief SP 2210 1 1 50 0 0 0 0 0 0 Fund SP 2210 1 789 21 0 0 0 0 0 0 SP 2210 1 789 36 0 80 0 88 96.8 106.5 SP 2210 2 102 Establishment of New Govt. 1 0 0 0 0 0 0 Page 33 of 153

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head SP 2210 2 102 Homoeopathic Dispensaries 31 0 0.1 0 0.1 0.1 0.1 SP 2210 2 102 21 1.4 2.9 1.5 1.5 1.5 1.6 SP 4210 3 102 52 0.7 1.4 0.7 0.7 0.8 0.8 Strengthening of Existing Govt. SP 2210 2 789 21 0.7 1.3 0.7 0.7 0.7 0.8 Homoeopathic Dispensaries SP 4210 3 789 42 0 0 0 0 0 0 SP 4210 3 789 52 0.4 0.7 0.4 0.4 0.4 0.4 CSS 2210 2 101 AYUSH Gram (75:25) 13 0 0.2 0 0.2 0.2 0.2 CSS 2210 2 101 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 4 101 21 0 0 0 0 0 0 CSS 2210 4 101 50 0 0 0 0 0 0 CSS 2210 2 101 1 0 0 0 0 0 0 Co-location and Establishment of CSS 2210 2 101 13 0 0.6 0 0.6 0.6 0.6 OPD Clinics in CHCs (75:25) CSS 2210 2 101 21 10.4 24 10.7 10.9 11.1 11.3 CSS 2210 4 101 50 0 0 0 0 0 0 CSS 2210 2 789 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 789 21 4.9 11.5 5 5.1 5.2 5.3 CSS 2210 2 101 13 0.6 3.7 0.6 0.6 0.6 0.6 CSS 2210 2 101 21 0.9 4.8 0.9 0.9 0.9 0.9 Establishment of ISM & H wings CSS 2210 4 101 50 0 0 0 0 0 0 in district Allopathic Hospitals CSS 2210 2 789 13 0.5 1.6 0.5 0.5 0.5 0.5 (75:25) CSS 2210 2 789 21 0.2 2.2 0.2 0.2 0.2 0.2 CSS 2210 2 789 53 0 0.1 0 0.1 0.1 0.2 CSS 2210 2 101 Establishment of ISM Polyclinic 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 101 with Regimental Therapy of 21 0.1 0.3 0.1 0.1 0.1 0.1 CSS 2210 2 789 Unani and Panchkarma etc. 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 789 (75:25) 21 0 0.1 0 0 0 0 CSS 2210 2 101 1 1.2 1 1.4 1.6 1.7 2 CSS 2210 2 101 Establishment of Program 13 0.5 0.8 0.5 0.5 0.6 0.6 CSS 2210 4 101 Management Unit (PMU) 50 0 0 0 0 0 0 CSS 2210 2 789 (75:25) 1 0.8 0.5 0.9 1 1.1 1.2 CSS 2210 2 789 13 0.1 0.4 0.1 0.1 0.1 0.1 Mobility Support at State and CSS 2210 2 101 13 0.8 0.8 0.8 0.8 0.8 0.9 District Level (75:25) Public Health Outreach Activity CSS 2210 2 101 13 0 1 0 1 1 1.1 (75:25) CSS 2210 2 101 School Health Program (75:25) 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 101 Strengthening of Enforcement 1 0 0 0 0 0 0 CSS 2210 2 101 Mechanism for Quality Control of 13 0 0.7 0 0.7 0.7 0.7 Page 34 of 153

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CSS 2210 2 101 Ayurveda, Siddha & Unani Drugs 21 0 0 0 0 0 0 CSS 2210 2 789 (75:25) 13 0 0.3 0 0.3 0.3 0.3 CSS 2210 2 101 1 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 101 Strengthening of Drug Testing 13 0 0.6 0 0.6 0.6 0.6 CSS 2210 2 789 Laboratory at Patiala (75:25) 13 0 0.3 0 0.3 0.3 0.3 CSS 2210 2 789 21 0 0 0 0 0 0 CSS 2210 2 101 Supply of Essential Drugs for 21 18.5 54.4 18.9 19.3 19.6 20 CSS 2210 4 101 Ayurveda, Siddha & Unani 50 0 0 0 0 0 0 Dispensaries situated in Rural & CSS 2210 2 789 Backward areas (75:25) 21 8.7 25.6 8.9 9.1 9.2 9.4 CSS 2210 4 101 Upgradation and Extension of 21 0 0.1 0 0.1 0.1 0.1 CSS 2210 4 789 Govt. Ayurvedic Pharmacy and 0 0 0 0 0 0 0 CSS 2210 4 789 Stores, Patiala 21 0 0 0 0 0 0 CSS 2210 4 101 1 4 4 4.5 5 5.7 6.3 CSS 2210 4 101 13 0.5 0.3 0.5 0.5 0.5 0.5 CSS 2210 4 101 21 1.9 5.3 1.9 1.9 2 2 CSS 2210 4 101 27 0 0 0 0 0 0 CSS 2210 4 101 Upgradation of 5 AYUSH 36 0 0 0 0 0 0 CSS 2210 4 101 Hospitals (75:25) 52 3.3 0 3.4 3.5 3.5 3.6 CSS 4210 3 101 53 0 0 0 0 0 0 CSS 2210 4 789 1 1.9 1.9 2.1 2.4 2.7 3 CSS 2210 4 789 13 0.2 0.2 0.2 0.2 0.2 0.2 CSS 2210 4 789 21 2.5 2.5 2.5 2.6 2.6 2.7 CSS 2210 1 1 36 0 27.2 0 29.9 32.9 36.2 CSS 2235 60 200 Aam Aadmi Bima Yojna (50:50) 50 0 0 0 0 0 0 CSS 2210 1 789 36 0 12.8 0 14.1 15.5 17 CSS 2210 1 1 31 20 15.6 22 24.2 26.6 29.3 CSS 2210 1 1 36 20 4.8 22 24.2 26.6 29.3 CSS 2210 1 1 50 0 0 0 0 0 0 CSS 2210 1 110 21 0 0 0 0 0 0 Matching Grant to State Blood CSS 2210 1 110 36 0 0 0 0 0 0 Transfusion council under the CSS 2210 1 789 1 1.2 4.8 1.3 1.5 1.7 1.9 AIDS Control Society (50:50) CSS 2210 1 789 21 0 0 0 0 0 0 CSS 2210 1 789 31 1.2 4.8 1.3 1.4 1.6 1.7 CSS 2210 1 789 36 0 0 0 0 0 0 CSS 2210 1 789 50 0 0 0 0 0 0 CSS 2210 1 110 National Program for Prevention 31 25.6 40.8 28.1 30.9 34 37.4 CSS 2210 1 110 and Control of Cancer Diabetes, 36 51.7 0 52.7 53.8 54.9 56 Page 35 of 153

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CSS 4210 1 110 Cardivascular Disease and 50 0 0 0 0 0 0 CSS 4210 1 110 Strokes (NPCDCS) (75:25) 52 0 0 0 0 0 0 CSS 4210 1 110 53 0 0 0 0 0 0 CSS 2210 1 789 31 9.8 19.2 10.7 11.8 13 14.3 CSS 2210 1 789 36 26.6 0 27.1 27.7 28.2 28.8 CSS 4210 1 789 50 0 0 0 0 0 0 CSS 2210 1 110 21 0 0 0 0 0 0 CSS 2210 1 110 31 7 13.6 7.7 8.5 9.3 10.2 CSS 2210 1 110 36 61 27.2 67.1 73.8 81.2 89.3 CSS 4210 1 110 National Program of Health Care 50 0 0 0 0 0 0 CSS 4210 1 110 of Elderly (75:25) 52 0 0 0 0 0 0 CSS 4210 1 110 53 0 0 0 0 0 0 CSS 2210 1 789 31 0.8 6.4 0.9 1 1.1 1.2 CSS 2210 1 789 36 31.2 12.8 34.3 37.8 41.5 45.7 CSS 2210 1 1 31 0 0 0 0 0 0 CSS 2210 1 110 31 897.6 1033.5 987.4 1086.1 1194.7 1314.2 CSS 4210 1 110 35 0 0 0 0 0 0 CSS 2210 1 110 36 1330.9 1543 1464 1610.4 1771.4 1948.6 CSS 4210 1 110 42 0 0 0 0 0 0 CSS 4210 1 110 53 0 0 0 0 0 0 CSS 2210 1 789 31 422.4 486.3 464.6 511.1 562.2 618.4 National Rural Health Mission CSS 2210 1 789 36 626.3 726.1 688.9 757.8 833.6 917 (NRHM) (75:25) CSS 4210 1 789 42 0 0 0 0 0 0 CSS 4210 1 789 52 0 0 0 0 0 0 CSS 2210 1 1 13 0 0 0 0 0 0 CSS 2210 1 110 31 97 204 106.6 117.3 129 141.9 CSS 2210 1 110 36 490.8 408 539.9 593.9 653.3 718.6 CSS 2210 1 789 31 45.6 96 50.2 55.2 60.7 66.8 CSS 2210 1 789 36 231 192 254.1 279.5 307.4 338.2 CSS 2210 1 1 31 0 0 0 0 0 0 CSS 2210 1 1 36 0 15.4 0 16.9 18.6 20.5 CSS 2210 1 110 Rashtriya Swasthya Bima Yojna 36 17.5 56.8 19.3 21.2 23.3 25.6 CSS 2210 1 110 for workers covered under BPL 42 0 0 0 0 0 0 CSS 2210 1 789 (75:25) 21 0 0 0 0 0 0 CSS 2210 1 789 31 0 0 0 0 0 0 CSS 2210 1 789 36 12.5 117.8 13.8 15.1 16.6 18.3 CSS 2210 1 1 Upgradation/ Strengthening of 31 0 0 0 0 0 0

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CSS 2210 1 1 Nursing Services in the State 36 6.8 163.2 7.5 8.2 9.1 10 CSS 2210 1 789 (85:15) 36 3.2 76.8 3.5 3.9 4.3 4.7 CSS 2210 1 789 50 0 0 0 0 0 0 Behaviour Change CSS 2210 2 102 Communication (BCC)/IEC 13 0 0.1 0 0.1 0.1 0.1 Activities (75:25) CSS 2210 2 102 13 0 0.2 0 0.2 0.2 0.2 CSS 2210 2 102 21 6 2.2 6.1 6.2 6.3 6.5 CSS 2210 2 102 27 0 10.3 0 11.4 12.5 13.8 CSS 2210 2 102 Co-location in CHCs (OPD 36 0 0 0 0 0 0 CSS 4210 3 102 Clinic)/ Establishment of Ayush 52 0 3.6 0 3.7 3.8 3.9 CSS 2210 2 789 OPD Clinics in CHCs/SDHs/DHs 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 789 (75:25) 21 4.4 1 4.5 4.6 4.7 4.8 CSS 2210 2 789 27 0 5.8 0 6.3 7 7.7 CSS 4210 3 789 52 0 1.7 0 1.8 1.8 1.8 CSS 4210 3 789 53 0 0 0 0 0 0 CSS 2210 2 102 13 0.1 0.1 0.1 0.1 0.1 0.1 Establishment of specialty clinic CSS 2210 2 102 21 1.2 1.2 1.3 1.3 1.3 1.3 of ISM&H Hospitals - Provision CSS 2210 2 789 13 0.1 0.1 0.1 0.1 0.1 0.1 of Medicines. (75:25) CSS 2210 2 789 21 0.6 0.6 0.6 0.6 0.6 0.6 CSS 2210 2 101 21 0 0 0 0 0 0 CSS 2210 4 101 50 0 0 0 0 0 0 CSS 2210 2 102 1 0 0 0 0 0 0 CSS 2210 2 102 13 0 0.3 0 0.3 0.3 0.3 CSS 2210 2 102 21 0.5 2 0.5 0.5 0.5 0.6 Establishment of ISM & H Wings CSS 2210 2 102 27 0 7.7 0 8.5 9.3 10.3 in District Allopathic Hospitals CSS 2210 2 102 36 0 0 0 0 0 0 (75:25) CSS 2210 2 102 52 0 2.6 0 2.7 2.7 2.8 CSS 2210 2 789 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 789 21 0.2 1 0.2 0.3 0.3 0.3 CSS 2210 2 789 27 0 3.8 0 4.1 4.6 5 CSS 2210 2 789 52 0 1.2 0 1.2 1.3 1.3 Establishment of Program CSS 2210 2 102 1 0 0.1 0 0.1 0.1 0.1 Management Unit (75:25) Mobility Support at State and CSS 2210 2 102 13 0 1 0 1 1 1.1 District Level (75:25) Public Health Outreach Activity CSS 2210 2 102 13 0 0.1 0 0.1 0.1 0.1 (75:25) Page 37 of 153

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Sub- Major Minor 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * major Scheme SOE head head (RE) (BE) (P) (P) (P) (P) head CSS 2210 2 102 21 13.2 12.9 13.5 13.7 14 14.3 Supply of essential drugs of CSS 2210 2 102 50 0 0 0 0 0 0 ISM&H (75:25) CSS 2210 2 789 21 6.3 6.1 6.4 6.6 6.7 6.8 CSS 2210 2 102 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 102 21 0 0 0 0 0 0 CSS 2210 2 102 27 0 2.3 0 2.5 2.8 3 Upgradation of AYUSH CSS 2210 2 102 52 0 6.1 0 6.2 6.3 6.5 Homoeopathic Dispensaries CSS 2210 2 789 (75:25) 13 0 0.1 0 0.1 0.1 0.1 CSS 2210 2 789 21 0 0 0 0 0 0 CSS 2210 2 789 27 0 1.1 0 1.2 1.3 1.4 CSS 2210 2 789 52 0 2.9 0 2.9 3 3 * CS = Center Sector schemes, SP = State Plan schemes, CSS = Centrally Sponsored Schemes

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3.3.2.1 Gender-sensitive allocations for plan schemes under trend scenario

In the context of plan schemes presented above, it may be noted that gender sensitivity in allocation of budgetary resources started in India with the Seventh Five-Year Plan (1987-1992). Formal earmarking of funds for women, however, began with the introduction of Women's Component Plan (WCP) in 1997-98 and has continued since then. Following table presents the list of plan schemes of the DoH&FW which have a WCP. The share of allocation for WCP in the approved plan outlay for such schemes in FY 2015-16 has been computed and used to estimate the gender-based allocations in the scheme-wise projections made in above table under Trend Scenario of MTEF.

Table 11: Women’s Component Plan in the Trend scenario projections for plan schemes under MTEF (in INR million)

Approved Outlay MTEF Projections Scheme Annual Plan 2015-16 2015-16 (P) 2016-17 (P) 2017-18 (P) 2018-19 (P) Scheme Name Code Total % of Total Total Total Total WC WC WC WC WC Outlay WC Outlay Outlay Outlay Outlay National Rural Health Mission DHS 01 3,788.9 1,531.0 40% 3,604.9 1,456.7 3,965.4 1,602.3 4,361.9 1,762.5 4,798.1 1,938.8 (NRHM) (60:40) DHS 02 Implementation of Emergency 390.0 156.0 40% 429.0 171.6 471.9 188.8 519.0 207.6 570.9 228.4 Response Services in the State DHS 03 Rashtriya Swasthya Bima Yojna for 190.0 76.0 40% 33.0 13.2 53.2 21.3 58.5 23.4 64.4 25.8 workers covered under BPL (60:40) DHS 09 Matching Grant to State Blood Transfusion council under the AIDS 30.0 16.0 53% 46.6 24.9 51.3 27.4 56.4 30.1 62.1 33.1 Control Society (50:50) National Urban Health Mission DHS 10 900.0 360.0 40% 950.8 380.3 1,045.9 418.4 1,150.5 460.2 1,265.5 506.2 (NUHM) (60:40) DHS 11 Punjab Urban Health Infrastructure (DHS- 0-0 10,11,13,15 and 25) (Civil 0.100 0.040 40% - - 0.1 0.0 0.1 0.0 0.1 0.1 works+Equipment) (ACA 2011-12) DHS 12 Seed Corpus of Cancer Relief Fund 250.0 87.5 35% 275.0 96.3 390.5 136.7 429.5 150.3 472.5 165.4 DHS 14 Balri Rakshak Yojna - - 0% ------DHS 24 Upgradation/ Strengthening of 240.0 240.0 100% 11.0 11.0 12.1 12.1 13.3 13.3 14.6 14.6 Nursing Services in the State (85:15) DHS 44 Bhagat Puran Singh Medical 500.0 200.0 40% 55.0 22.0 401.5 160.6 441.6 176.6 485.8 194.3 Insurance Scheme for poor people AY 01 Supply of Essential Drugs for Ayurveda, Siddha & Unani 80.0 18.2 23% 27.7 6.3 28.3 6.4 28.8 6.6 29.4 6.7 Dispensaries situated in Rural & Backward areas (60:40) Upgradation of 5 AYUSH Hospitals AY 02 14.2 5.8 40% 15.0 6.1 16.0 6.5 17.1 6.9 18.2 7.4 (60:40) Total 6,383.2 2,690.5 5,448.0 2,188.2 6,436.2 2,580.4 7,076.7 2,837.6 7,781.6 3,120.7

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Non-plan Expenditure Projections under Trend Scenario

There are various non-plan schemes operational for the department, details of which have not been presented in the interest of space. However, a sample table for the sub head (o1) is presented below for reference.

Table 12: MTEF projections for non-plan schemes- Trend Scenario (in INR million)

Sub- Major Minor Sub 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category major SOE head head head (RE) (BE) (P) (P) (P) (P) head non-plan 2210 01 001 01 01 155 165 158.1 161.3 164.6 168 non-plan 2210 01 001 01 11 0.1 0.1 0.1 0.1 0.1 0.1 non-plan 2210 01 001 01 12 0 0 0.0 0 0 0 non-plan 2210 01 001 01 13 0.8 0.8 0.8 0.8 0.8 0.9 non-plan 2210 01 001 01 14 0 0 0.0 0 0 0 non-plan 2210 01 001 01 24 1.6 1.6 1.6 1.7 1.7 1.7 non-plan 2210 01 001 01 26 1.5 1.2 1.5 1.6 1.6 1.6 non-plan 2210 01 001 01 27 1 1 1.2 1.4 1.6 1.9 non-plan 2210 01 001 01 31 235.9 220 259.5 285.4 314 345.4 non-plan 2210 01 001 01 50 1.5 2 1.5 1.6 1.6 1.6 non-plan 2210 01 001 01 91 3.5 3.5 3.6 3.6 3.7 3.8 non-plan 2210 01 001 01 92 0.3 0.3 0.3 0.3 0.3 0.3 non-plan 2210 01 001 01 93 4 4 4.1 4.2 4.2 4.3 non-plan 2210 01 001 01 94 0.6 0.6 0.6 0.6 0.6 0.7

3.3.2.2 Summary of Trend Scenario, bottom-up MTEF projections The below table shows the expenditure projections for plan and non-plan schemes of GoP in the next three years under trend scenario. Following are the key observations made:

 Increase in total departmental expenditure: Total expenditure under the department is projected to increase by 7.7% in 2016-17 over 2015-16 (BE). It is further projected to increase annually by 10.4% and 10.5% in 2017-18 and 2018-19 respectively.  Decreasing share of plan expenditure: Share of total plan expenditure under the department is projected to decrease from 33.3% in 2015-16 (BE) to 31.6% in 2016-17. It is then further projected to decrease to 31.5% in 2017-18 and 31.4% in 2018-19.  Annual growth in plan expenditure as compared to non-plan expenditure: Plan and non-plan expenditure are projected to increase with around same rates except in the first year of projection i.e. 2016- 17.

Table 13: Summary of plan and non-plan expenditure projections under Trend Scenario

2015-16 2016-17 2017-18 2018-19 Description Nature of expenditure (BE) (P) (P) (P) % share in total Plan Expenditure 33.3% 31.6% 31.5% 31.4% expenditure Non-Plan Expenditure 66.7% 68.4% 68.5% 68.6% Plan Expenditure 2.1% 10.0% 10.0%

Annual Growth Non-Plan Expenditure 10.5% 10.6% 10.7%

Total 7.7% 10.4% 10.5%

Note: Plan expenditure includes expenditure under center sector, state plan and CSS

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Of these expenditure projections for DoH&FW under trend scenario, share of revenue and capital expenditure on ‘medical and public health’ in the total expenditure of DoH&FW is presented in below table.

Table 14: Share of revenue and capital expenditure projections on medical and public health in total departmental expenditure, DoH&FW

2018- Major 2014-15 2015-16 2016-17 2017-18 Description 2013-14 19 Head (RE) (BE) (P) (P) (P) 2210 Medical and Public Health 86.6% 87.1% 92.1% 92.2% 92.5% 92.8% Capital Outlay on Medical and 4210 0.3% 0.1% 0.1% 0.1% 0.1% 0.1% Public Health

Share of capital expenditure on medical and public health has been considerably low consistently as evident from above table. While by very nature, health sector is a labour-intensive sector implying relatively higher share of revenue expenditure than in other sectors, however these persistent low levels of capital expenditure in the background of inadequate health infrastructure and quality facilities in the State is a cause of concern and needs to be addressed. 3.4 Bottom-Up Budgeting- Reform Scenario

As discussed in Section 2.2.2, after estimating the baseline MTEF, the second part of bottom-up budgeting involves:

 Identification of issues and reform interventions (section 3.4.1): This is done through four sources, namely (a) One-time preparation of a logical framework (log-frame) for all schemes level with annual update; (b) Measuring physical progress on Performance Indicators (PIs) – both temporal & comparative assessment (c) Scheme Review, and (d) Institutional Review.

 Estimating the associated cost implications of identified interventions.

3.4.1 Identification of reform intervention 3.4.1.1 Preparation of logical framework at scheme level To begin with, ‘Scheme Outputs’ are specified/ defined for all schemes that are presently running under the DoH&FW and are expected to continue during 2016-18. These outputs are then mapped to the concerned ‘Objective of the department’ to which they contribute achieving. Results of achievement of departmental objectives have been termed as ‘departmental outcome’. Outcomes of all departments then contribute to attainment of long-term goal of the State Government, which is, social and economic upliftment of its people.

The objective of the department is to provide affordable, accessible, sustainable, high quality essential health care to all. The department specially focuses on the poor, mother, child and elderly, and those living in underserved areas. It emphasises on the development and maintenance of standards of service in hospitals and health care facilities. Detailed strategies of the department in achieving its objectives have already been mentioned in section 3.1.

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Table 15: Logical-framework (log-frame) for the DoH&FW, GoP for schemes presently running under the department

S. Scheme name/ [Budget for Scheme Outputs PI for Scheme Output Departmental PI for Departmental No FY 2015-16 - in INR million] Objective Objective (Outcome) 1 National Rural Health Mission Control of diseases like % of malarial cases reported per Provide high quality CBR/ CDR/ IMR/ NMR/ MMR (NRHM) [3,788.9] malaria, filaria, iodine 100 samples collected essential healthcare for all (per 10,000 live births) deficiency disorders etc. and with special focus on poor, other vector borne diseases mother, child and elderly Infrastructural development of Microfilarial rate Reduce IMR, NMR and Life expectancy at birth primary healthcare facilities MMR Healthcare services for Ratio of density of public health Universal coverage of % increase in patient visits to a improving mother and child facilities (measured by number routine immunisation SC, PHC or CHC health including institutional of public health facility per 1 deliveries, sterilisation, million population) in rural immunisation, child nutrition, areas to that in urban areas etc. (major outputs) % institutional deliveries in the Reduce burden of % of people living within X km of state communicable diseases a SC, PHC or CHC % sterilisation per 10,000 Improve geographical population in the state access to public healthcare % of pregnant women who received 1+ antenatal care visits % children fully immunised % of underweight, stunted and wasted children aged less than 5 years 2 National Urban Health Mission Control of diseases like % of malarial cases reported per Provide high quality CBR/ CDR/ IMR/ NMR/ MMR (NUHM) [900.0] malaria, filaria etc. and other 100 samples collected essential healthcare for all (per 10,000 live births) vector borne diseases with special focus on poor, mother, child and elderly Infrastructural development of Microfilarial rate Reduce IMR, NMR and Life expectancy at birth primary healthcare and family MMR planning facilities Healthcare services for Ratio of density of public health Universal coverage of % increase in patient visiting improving mother and child facilities (measured by number routine immunisation primary facilities health including institutional of public health facility per 1 deliveries, sterilisation, million population) in urban immunisation, child nutrition, areas to that in rural areas etc. (major outputs) % institutional deliveries in the Reduce burden of % of people living within X km of urban part of state communicable diseases the primary facilities % sterilisation per 10,000 Improve geographical population in the urban part of access to public healthcare the state % of pregnant women who Page 42 of 153

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S. Scheme name/ [Budget for Scheme Outputs PI for Scheme Output Departmental PI for Departmental No FY 2015-16 - in INR million] Objective Objective (Outcome) received 1+ antenatal care visits % children fully immunised % of underweight, stunted and wasted children aged less than 5 years 3 Matching Grant to State Blood Provision to State Blood % decrease in blood transfusion Providing high quality CDR/ MMR/ IMR Transfusion council under the Transfusion Council to cases essential healthcare by AIDS Control Society [30.0] conduct all activities under % increase in blood unit improving blood blood transfusion like collection transfusion conditions grouping, cross matching, average number of inspections donor selection, blood of blood banks in the state collection, preservation, number of blood drives transportation and inspection organised in a year of all blood banks in the state average waiting time for blood donation % utilization of blood supply 4 Rashtriya Swasthya Bima Yojna Provision for providing % of out of pocket expenditure Making high quality % death due to poverty for workers covered under BPL medical cover to workers on treatment by workers covered essential health care [190.0] covered under BPL under BPL should reduce affordable to the poor workers 5 Bhagat Puran Singh Medical Provision for providing % of eligible families enrolled/ Making high quality % reduction in CDR in BPL Insurance Scheme for poor medical insurance to the registered in FY2016 essential health care families people [500.0] enrolled poor families & upto % reduction inf out-of-pocket affordable to the poor INR 30,000 per family per expenditure of blue card year subject to limits cardholders on treatment by poor people should reduce 6 Creation of Cancer & Drug Provision for establishment of % increase in number of cancer Providing high quality % deaths due to cancer addiction Treatment cancer and drug addiction and drug addiction treatment essential healthcare Infrastructure [1000.0] treatment centers centers through improved % cancer cases per 1 million treatment to cancer population patients 7 Implementation of Emergency Provision for ambulance % of emergency case patients Providing accessible % reduction in pre-hospitalisation Response Services in the State services in government that availed ambulance services healthcare for all and and in-transit deaths [390.0] healthcare centers maintenance of standards Provision for availability of of service in healthcare primary medical services at facilities through reduced each government health care pre-hospitalisation and in- centers transit deaths 8 Upgradation of infrastructure in Provision for upgrading % progress in construction work Providing free/ affordable % increase in patients visiting the Government Medical College and government medical colleges undertaken healthcare services to the respective government hospital

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S. Scheme name/ [Budget for Scheme Outputs PI for Scheme Output Departmental PI for Departmental No FY 2015-16 - in INR million] Objective Objective (Outcome) Hospital (Patiala) [65.0] public by ensuring % reduction in casualties 9 Upgradation of infrastructure in Provision for upgrading % progress in construction work improved medical facilities % increase in patients visiting the Government Medical College and government medical colleges undertaken respective government hospital Hospital (Amritsar) [25.0] % reduction in casualties 10 Establishment of Primary Rural Provision for establishment of % progress in % reduction in death due to drug Rehabilitation and Drug De- primary rural rehabilitation establishment/construction addiction Addiction Centers in the state and drug de-addiction centers work undertaken (NABARD) [500.0] 11 Punjab Urban Health Provision for developing urban % progress in construction work % increase in patients availing the Infrastructure [0.1] health care centers undertaken government urban health facilities 12 Strengthening of Training School Provision for strengthening % Progress in the construction % Increase in trained staff buildings [5.3] training school buildings work undertaken to strengthen % increase in the capacity of the the school buildings training schools 13 Establishment of ISM & H wings Provision for establishment of % progress in construction work % increase in patients visiting in District Allopathy Hospitals ISM & H wings in district undertaken ISM & H wings in district [1.9] allopathy hospitals allopathy hospitals 14 Balri Rakshak Yojna [0] Welfare scheme to encourage % increase in couples availing Improving sex ratio % increase in sex ratio more girls child birth to the scheme balance skewed sex ratio 15 Upgradation/ Strengthening of Provision for strengthening of % increase in upgraded nursing Provide high quality % decrease in IMR, MMR Nursing Services in the State nursing services centers essential healthcare by [240.0] % increase in manpower strengthening preventive, % increase in skills of the nurses promotive and curative 16 Rural Family Welfare Services Provision for providing rural % increase in number of SCs services % decrease in IMR, MMR (Funding of 2858 Sub-Centers) family welfare services % increase in facilities at SCs % decrease in communicable [600.0] diseases 17 Revamping of Organisational Provision for revamping of % increase in facilities in the % decrease in deaths Services of Delivery System organisational services of system [52.7] delivery system 18 Urban Family Welfare Services Provision for providing urban % increase in family planning % Decrease in communicable [14.9] family welfare services centers diseases % increase in staff at the centers % Decrease in marital problems 19 Revamping of Organisational Provision for revamping of % increase in facilities in the % decrease in deaths due to Services [1.0] organisational services system unavailability of the facilities 20 Incentive grant for reduction in Provision for incentive grants Volume of incentive grants % Decrease in IMR IMR under 13th Finance for reduction in IMR received Commission [1.0] 21 Operationalization of state Provision for operationalizing % increase in operationalized % reduction in disease like Radiation Safety Agency in the the state radiation safety state radiation safety agencies cancer, leukemia, tumor etc.

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S. Scheme name/ [Budget for Scheme Outputs PI for Scheme Output Departmental PI for Departmental No FY 2015-16 - in INR million] Objective Objective (Outcome) State [0.01] agencies caused due to radiations 22 National Program for Prevention Prevention and control of Cancer prevalence rate Provide high quality % deaths due to cancer, diabetes, and Control of Cancer Diabetes, diseases- cancer, diabetes, essential healthcare by cardio vascular diseases and Cardivascular Disease and cardio vascular diseases and strengthening preventive, stroke Strokes (NPCDCS) stroke through: behavior and Proportion of cancer cases promotive and curative % patients cured out of total no. [60.0] lifestyle changes, provide early detected in early stages services for selected non- of patients that have undergone diagnosis and treatment, build No. of district cancer facilities communicable diseases treatment for the diseases capacity for the same, train per district covered under the program human resources Prevalence of diabetes among persons aged 25+ years Prevalence of obesity or increased blood pressure among persons aged 25+ years % patients cured out of total no. of patients that have undergone treatment for the diseases covered under the program % district hospitals that have NCD clinics and cardiac care units 23 National Program of Health Care Domiciliary visits by trained % elderly population served by Providing high quality CDR of Elderly (NPCHE) health workers to provide trained health workers under healthcare services with [60.0] preventive and promotive NPCHE special focus on elderly healthcare services to elderly people people Services for management of % of trained medical and para- Average age of the dead due to old chronic and disabling diseases medical professionals under age amongst the old NPCHE In-service training to medical No. of medical rehabilitation and para-medical and therapeutic centers in the professionals in geriatric state for the elderly medicine Infrastructure for providing No. of DHs with operational medical rehabilitation and geriatric OPD therapeutic services to old Information, Education and No. of regional geriatric centers Communication (IEC) in the state activities for healthy ageing % expenditure out of NPCHE on (major outputs) IEC activities 24 National AIDS & STD Control Prevention of AIDS and STD % Decrease in AIDS and STD Providing high quality % Decrease in deaths due to AIDS [370.0] related cases healthcare services with and STD Page 45 of 153

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S. Scheme name/ [Budget for Scheme Outputs PI for Scheme Output Departmental PI for Departmental No FY 2015-16 - in INR million] Objective Objective (Outcome) special focus on young people 25 National Program for Control of Provision for blindness control % increase in patients covered Providing high quality % Decrease in blind patients Blindness [60.0] under this program healthcare services with special focus on elderly people 26 National Tobacco Control Provision for controlling % increase in patients covered Providing high quality % Decrease in number of cases Program [4.5] tobacco uses and its under this program healthcare services with repercussions special focus on young people 27 National Iodine Deficiency Provision for reducing iodine % increase in patients covered Providing high quality % Decrease in iodine deficiency Disorder Control Program [2.4] deficiency disorder under this program healthcare services to the related cases i.e. thyroid diseases people 28 Strengthening of District Strengthening newly created % of newly created districts Providing affordable % increase in patients visiting Headquarters staff in newly districts with appropriate staff getting the required staff healthcare by Ayurveda facilities created Districts [20.0] mainstreaming AYUSH 29 Strengthening of Existing Govt. Strengthening of the existing % increase in the government healthcare by % increase in patients visiting Homoeopathic Dispensaries government homeopathic homeopathic dispensaries mainstreaming AYUSH homeopathic dispensaries [6.3] dispensaries 30 Strengthening of DTL Patiala Strengthening of drug testing % increase in production of % increase in sales of ayurvedic [1.7] laboratories Patiala ayurvedic medicine drugs 31 Supply of Essential Drugs for Strengthening drug supply % increase in supply of essential % increase of sales of the essential Ayurveda, Siddha & Unani system in rural and backward drugs drugs Dispensaries situated in Rural & areas Backward areas [80.0] 32 Supply of essential drugs of Strengthening of essential % increase in supply of essential % increase of sales of the essential ISM&H [19.0] homeopathy drugs supply homeopathy drugs drugs system 33 Co-location and Establishment of Provision for establishing OPD % increase in OPD clinics in % increase in patients visiting OPD Clinics in PHCs [36.2] clinics of Ayurveda in PHCs PHCs OPD clinics in PHCs 34 Upgradation of 5 AYUSH Provision for updating 5 % increase in facilities and % increase in patients visiting Hospitals [14.2] AYUSH hospitals infrastructure in the hospitals AYUSH hospitals 35 Co-location in CHCs (OPD Provision for establishing OPD % increase in OPD clinics in % increase in patients visiting Clinic)/ Establishment of Ayush clinics of Homeopathy in CHCs/SDHs/DHs OPD clinics in CHCs/SDHs/DHs OPD Clinics in CHCs/SDHs/DHs CHCs/SDHs/DHs [25.0] 36 Establishment of ISM & H wing Provision for establishing ISM % increase in ISM & H wing in % increase in patients visiting in District Allopathic Hospitals- & H wing in district allopathic District Allopathic Hospitals ISM & H wing of homeopathy Provision of Medicines [0] hospitals 37 Establishment of Program Provision for establishing % increase in PMU % increase in patients visiting Management Unit (PMU) [2.7] program management unit PMU Page 46 of 153

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S. Scheme name/ [Budget for Scheme Outputs PI for Scheme Output Departmental PI for Departmental No FY 2015-16 - in INR million] Objective Objective (Outcome) (PMU) 38 Establishment of specialty clinic Provision for establishing % increase in speciality clinics % increase in patients visiting of ISM&H Hospitals - Provision specialty clinic of ISM&H specialty clinic of ISM&H of Medicines [2.0] Hospitals Hospitals 39 Establishment of specialised Provision for establishing % increase in specialized % increase in patients visiting therapy center with specialized therapy center with hospitalization facility for specialized therapy centers hospitalization facility for hospitalization facilities for homeopathy Homoeopathy- Provision of Staff homeopathy & Medicines [0] 40 Establishment of ISM Polyclinic Provision for establishment of % increase in ISM Polyclinic % increase in patients visiting with Regimental Therapy of ISM Polyclinic with ISM Polyclinic Unani and Panchkarma etc/ Regimental Therapy of Unani [0.6] and Panchkarma etc 41 Specialty Clinics of ISM Provision for establishing % increase in speciality clinics of % increase in patients visiting (Ayurveda) in District Allopathy speciality clinics of ISM ISM (Ayurveda) in District speciality clinics of ISM Hospitals [5.6] (Ayurveda) in District Allopathy Hospitals (Ayurveda) in District Allopathy Allopathy Hospitals Hospitals 42 Establishment of specialized Provision for establishment of % increase in specialized therapy % increase in patients visiting theraphy center with specialized therapy center with center with hospitalized facilities specialized therapy center hospitalized facilities for hospitalized facilities for for homeopathy Homoeopathy [0.3] homeopathy 43 Establishment of Specialty Provision for establishment of % increase in Specialty % increase in patients visiting Clinics/Treatment Centers of Specialty Clinics/ Treatment Clinics/Treatment Centers of Specialty Clinics/Treatment ISM and H in Allopathy Centers of ISM and H in ISM and H in Allopathy Centers of ISM and H Hospitals [0] Allopathy Hospitals Hospitals

3.4.1.2 Observations from log frame:  No scope found for convergence or grouping of similar schemes

 Need to capture baseline data at output and outcome levels for every scheme - disaggregated by gender, district, rural-urban wherever feasible

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3.4.1.3 Assess performance and gap Three types of analysis on physical indicators have been done: (a) Inter-State; (b) Intra-State; and (c) Assessment on own trend performance.

A. Inter-State Comparative Assessment This sub-section presents a comparative assessment of the current status of PIs of Punjab vis-a-vis selected other progressive states and average at all India level. Due to data availability constraints on all the PIs at output/ outcome level, the assessment has been done for only those PIs for which data was available in public domain. However, it is advised to collect data on all output level and outcome level PIs so that detailed scheme- level and department level assessment can be done in order to identify issues being faced in their implementation.

Table 16 on subsequent page present a comparative assessment of select PIs (subject to data availability) in the health sector in Punjab viz-a-viz the national average and some other progressive states.

General health indicators:

 Low Crude Birth and Death Rate: As of 2012, Crude Birth Rate (CBR) in the state stood at 16 as compared to the national average of 22. As of 2011, Crude Death Rate (CDR) in the state stood at the same level as the national average i.e. 7.1 and better than Andhra Pradesh (7.5).

 Low Infant Mortality and Neonatal Mortality Rate: As of 2013, Infant Mortality Rate (IMR) is low in the state (26) as compared to the national average (40) and states like Rajasthan and Haryana have an IMR as high as 47 and 41 respectively. In addition, in 2011, Neonatal Mortality Rate (NNMR) in the state (24) was also lower than the national average (31).

 Low Maternal Mortality Rate: As of 2011-13, Maternal Mortality Rate (MMR) in the state was low (141) as compared to the all India average (167) while Rajasthan on the other hand had MMR of 244.

 Low Total Fertility Rate: Total Fertility Rate (TFR) of 1.7 in the state was lower than the national average of 2.3 in 2013. Rajasthan had a TFR as high as 2.8. In this context, it may be noted that the state has witnessed a decennial growth of population during the period 2001-2011 of 14.2% as against the national decennial growth of 17.9%.

Physical infrastructure:

 Low number of SCs and PHCs: As of 2014, number of SCs and PHCs serving every 1 million population in the state are low as compared to the national aver. Number of PHCs per 1 million population in the state stands at 15 as against national average of 20. Number of SCs per one million population are 102, which are again low as compared to states like Rajasthan (198) and Gujarat (114). No. of CHCs per one million population is greater than the all India average.

Skilled Manpower:

 Inadequacy of AYUSH facilities: AYUSH facilities in the state leaves much to be desired for, both in terms of number of hospitals and registered practitioners under two of its main medicine systems- Homeopathy and Ayurveda. Population served per registered practitioner under homeopathy as well as Ayurveda was higher than the national average. Also, population served per Ayurveda hospital was higher than the national average.

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Disease control:

 Blindness: 94% of the target number of cataract operations as set by the GoI under the National program for Control of Blindness (NPCB) was undertaken in the year 2014-15. On the other hand, states like Gujarat, Haryana and Tamil Nadu have exceeded the target and undertook 198%, 145% and 197% of target cataract operations respectively during the same period.

 Malaria: Only o.1% of total samples collected in the state as of 2013 is reported malarial cases. This is much lower than the national average of 0.8%.

 Leprosy: Prevalence rate of leprosy per 10,000 of population in the state is 0.2 as of 2013-14. It is much lower than the national average, which is 0.7.

 Tuberculosis: As of 2011, percentage of cured cases out of New Sputum Positives (NSPs) in the state is equal to the national average. Other states in consideration are registering figures in the same range.

Maternal and child health:

 Low institutional deliveries: In 2014, percentage of institutional deliveries out of total deliveries in the state is lower (89.7%) as compared to all other states under comparison except Haryana and West Bengal. The states like Gujarat, Maharashtra and Tamil Nadu have 97.1 %, 97.7% and 99.9% institutional deliveries respectively.

 Low sterilization: Sterilization per 10,000 of population in the state as of 2013-14 was only 22, which was lower than the national average (31) and all other states in consideration9.

 High immunisation of children: As of 2011, the state had 68% of children (12-23 months) fully immunised. It performed better than all other states in consideration except Rajasthan and West Bengal. All India average was 54%.

 Low child malnutrition: As of NFHS-3, the state was the best performer among all the states in consideration in term of percentage of underweight and wasted children amongst children of age less than 5 years. It stood at second after Tamil Nadu in terms of percentage of stunted children. The percentage of underweight, stunted and wasted children amongst children of age less than 5 years were 25, 37 and 9, whereas at India level these were 43, 48 and 20 respectively.

Drug administration:

 Low expenditure on drugs: As per the High-Level Expert Group (HLEG) report 2011-12 of the Planning Commission of India, in 2010-11, drug expenditure as a percentage of total public health expenditure in the state (1%) was very low as compared to national average (13%). All the states in consideration spent higher on drugs as compared to Punjab.

9 Note: Total population of the state has been taken to normalize the indicator in absence of data on adult population. Hence, figures for percentage sterilization out of 10,000 population (total) are very low.

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Table 16: Health indicators in Punjab viz-a-viz national average and other progressive states

Best Performance Source of Andhra Tamil West S. No. Punjab Gujarat Haryana Maharashtra Rajasthan India performing Indicator information Pradesh Nadu Bengal state General Indicators data.gov.in Rajasthan 1. Crude Birth Rate (CBR) 16 18 21 22 17 26 16 16 22 (2012) (26) data.gov.in West Bengal 2. Crude Death Rate (CDR) 6.8 7.5 6.7 6.5 6.3 6.7 7.4 6.2 7.1 (2011) (6.2) Infant Mortality Rate SRS Report Tamil Nadu 3. 26 39 36 41 24 47 21 31 40 (IMR) 2013 (PIB) (21) Maternal Mortality Rate RGI (SRS) Maharashtra 4. 141 92 112 127 68 244 79 113 167 (MMR) 2011-13 (PIB) (68) Total Fertility Rate West Bengal 5. SRS 2013 (PIB) 1.7 1.8 2.3 2.2 1.8 2.8 1.7 1.6 2.3 (TFR) (1.6) Neonatal Mortality Rate data.gov.in Tamil Nadu 6. 24 28 30 28 18 37 15 22 31 (NMR) (2011) (15) Physical Health Infrastructure 7. Number of SCs per 1 NRHM MIS Rajasthan 102 87 114 95 90 198 115 109 120 million population (2014) (198) 8. Number of PHCs per 1 NRHM MIS Rajasthan 15 12 18 17 15 29 18 10 20 million population (2014) (29) 9. Number of CHCs per 1 NRHM MIS 5 2 5 4 3 8 5 4 4 Rajasthan (8) million population (2014) No. of DHs/ No. of 10. NRHM MIS districts per 1 million 0.76 0.10 0.38 0.75 0.20 0.47 0.41 0.22 0.59 Punjab (0.76) (2014) population Manpower Number of registered data.gov.in 11. dental surgeons per 1 252 77 44 44 162 5 201 34 97 Punjab (252) (2011) million population Population served per data.gov.in Maharashtra 12. registered practitioner- 6735 15559 4449 4768 2114 - 3721 9717 5571 (2011) (2114) Homoeopathy Population served per data.gov.in 13. hospital- Ayurveda (in 18 106 15 32 18 6 361 228 5 Rajasthan (6) (2011) 100, 000) Population served per data.gov.in Haryana 14. registered practitioner- 4951 7423 2067 1219 - - 17567 - 4870 (2011) (1219) Ayurveda

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Best Performance Source of Andhra Tamil West S. No. Punjab Gujarat Haryana Maharashtra Rajasthan India performing Indicator information Pradesh Nadu Bengal state Diseases Blindness 15. % of cataract operations NPCB (2014- Gujarat 94% 93% 198% 145% 175% 51% 197% 43% 96% achieved out of target 15) (198%)

Malaria Reported malarial cases 16. NVBDCP Punjab out of total samples 0.1% 0.2% 0.5% 0.5% 0.3% 0.4% 0.2% 0.6% 0.8% (2013) (0.1%) collected Leprosy NLEP Progress 17. Prevalence Rate per Rajasthan report 2013-14 0.18 0.55 0.83 0.27 0.92 0.17 0.40 0.87 0.68 10,000 of population (0.17) (2013-14) Tuberculosis Number of cured as RNTCP, Dte. 18. Rajasthan percentage of New GHS, MOHFW, 88% 89% 88% 86% 86% 91% 86% 85% 88% (91%) Smear Positive GOI (2011) Maternal Health 19. Percentage of NRHM MIS Tamil Nadu 89.7 92.6 97.1 88.0 97.7 94.8 99.9 81.6 86.6 Institutional Deliveries (2014) (99.9%) JSK family 20. Sterilization per 10,000 planning Maharashtra 22 36 39 28 47 41 34 22 31 population annual report (47) (2013-14) Child Health Percentage of children NRHM MIS West Bengal 21. (12-23 months) fully 68 61 55 52 66 74 56 80 54 (2014) (80) immunised Percentage of PIB, 17th May 22. Underweight in children 2012 (NFHS-3, 25 33 45 40 37 40 30 39 43 Punjab (25) less than 5 years 2005-06) UNICEF report Percentage of stunted in May 2011 Tamil Nadu 23. children less than 5 37 43 52 46 46 44 31 45 48 (NFHS-3, (31) years 2005-06) Percentage of wasted in UNICEF report 24. 9 12 19 19 17 20 22 17 20 Punjab (9) children less than 5 May 2011

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Best Performance Source of Andhra Tamil West S. No. Punjab Gujarat Haryana Maharashtra Rajasthan India performing Indicator information Pradesh Nadu Bengal state years (NFHS-3, 2005-06) MERT Number of government data.gov.in Tamil Nadu 25. 3 15 9 3 19 6 21 14 181 medical colleges (2013) (21) Number of AYUSH data.gov.in Maharashtra 26. 16 18 29 8 116 17 29 16 507 under-graduate colleges (2012) (116) Number of AYUSH post- data.gov.in Maharashtra 27. 1 5 7 - 42 2 6 5 123 graduate colleges (2012) (42) Drugs HLEG report 2011-12 of 28. Drug expenditure as a % Tamil Nadu planning 1 10 7.6 5.5 5.2 1.5 12.2 6.8 13 of Health Expenditure (12.2) commission of India Source: Various: www.mospi.nic.in/ www.data.gov.in/ www.indianmedicine.nic.in/ www.nrhm.mis.in/ HLEG Report 2011-12/ NLEP Progress Report for various years/ NRHM MIS 2014/PIB/Unicef report 2011/ NVBDCP 2013, 2014/JSK family planning annual report 2013-14/ NPCB Performance Reports

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B. Intra -State Comparative Assessment Earlier sections have dealt with the state’s performance with respect to other states and all India average and certain important indicators performance over the years. However, the different parts of the state are not at the same levels in all dimensions, given its geographical and political variance. The central districts or districts near Chandigarh or Haryana have different considerations than the districts near boarder areas (Jammu region). This section would highlight the district wise performance on certain important indicators, which would help the department to concentrate on the concerned areas in efficient manner.

Thus, particularly on indicators where the State is significantly lagging behind performance attained by other states, district-wise analysis has been carried out in below Table 17 to focus deeper on performance of such indicators.

Table 17: Intra-state performance on select indicators in health sector

Districts Pop Pop Child MMR Doctors per Cancer patients (CM served served Sex one million Cancer Relief Fund per PHC per SC Ratio of pop Scheme 2012-15) Amritsar 69185 13685 824 150 2,972 Barnala 54139 7940 847 High-priority 24 701 Bathinda 69426 10210 854 110 2,049 Faridkot 77189 9960 851 201 1,100 Fazilka 5 664 Ferozepur 29496 4341 846 93 1,362 F.G.Sahib 42869 8221 843 20 414 Gurdaspur 40543 5592 824 High-priority 89 1,870 Hoshiarpur 48080 6503 859 85 1,047 Jalandhar 78343 11079 874 131 1,830 Kapurthala 62705 9263 872 75 692 Ludhiana 106022 13561 865 124 2,723 Mansa 54982 7473 831 High-priority 32 1,074 Moga 45261 8229 863 22 1,154 Mohali (SAS.N) 76510 12590 842 34 386 S. Mukatsar. S 53053 8842 830 High-priority 22 1,136 Nawanshahar 36018 6445 879 31 429 (SBS Nagar) Pathankot High-priority 8 262 Patiala 67703 10192 835 192 1,164 Ropar/ 52664 8249 866 115 329 Rupnagar Sangrur 51724 8532 835 High-priority 70 1,569 Tarn Taran 58928 7464 819 4 1,329 Punjab 62345 9405 88 26,256

C. Assessment on own trend performance

Here an analysis of the State on trend on PIs in the past years along with similar analysis on its own expenditure has been presented.

Table 18 presents the status and trend of key health PIs in Punjab in the past five years (2010 to 2014). Following are the observations made:

Physical infrastructure and manpower

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 No improvement in number of SCs and PHCs: There has been a decrease in the number of PHCs and SCs serving per one million population10 in the state during the period 2011 to 2014. However, the district hospitals serving per one million population increased over the same period.

Disease control

 Blindness: Percentage of cataract operations achieved out of annual GoI target for the State has been decreasing over the past years, falling from 130% in 2012 to 94% in 2014.

 Cancer: Number of prevalent cancer cases per one million of population increased slightly from 2319 in 2011 to 2340 in 2014. This is a concern for the state.

Child health

Full immunization: Percentage full immunization has come down from 79.8% in DLHS-3 to 68.4% in DLHS-4. This is a huge cause of concern for the state government as complete immunization is highly crucial for the overall development of the children.

Table 18: Past trend in performance indicators, DoH&FW, Punjab11

S. No. PI at Outcome/ Output level 2011 2012 2013 2014 Physical infrastructure 1. No. of SC per one million population 106 105 102

2. No. of PHC per one million population 16 16 15

Diseases Blindness- Percentage of target cataract 3. 130% 110% 94% operations achieved (FY) Cancer - Prevalent cancer cases per one 4. 2319 2305 2323 2340 million of population Child Health Decreased from 79.8% in DLHS-3 to 68.4% in DLHS-4 5. Percentage full immunization (< 70% in 7 districts of Gurdaspur, Ludhiana, Moga, Firozpur, Muktsar, Faridkot &Mansa) Source: www.data.gov.in/www.nrhm.mis.in/ NPCB 2014-15/NRHM MIS 2014/Lok Sabha unstarred question 2014

3.4.1.4 Analysis of past expenditure of the department This sub-section analyses trends in past expenditure of DoH&FW, GoP for the period 2012-13 to 2014-15 (RE). Expenditure under the departmental budget is classified broadly into two categories- Plan expenditure (SP), Non Plan expenditure (NP). Plan expenditure is further divided into three categories – expenditures under center sector schemes, expenditures under centrally sponsored schemes and expenditures under state plans.

Total expenditure of the department is listed in Table 19. Enhanced focus of the Government on improving the state’s health care system is evident from the fact that total departmental expenditure has almost doubled in the past 3 years growing at a CAGR of 35%.

Table 19: Expenditure under the DoH&FW, Punjab (in INR million)

Item 2012-13 2013-14 2014-15 (RE) CAGR Department expenditure 13880 16630 25390 35% Source: IFMS, various years

10 The indicator no. of SCs or PHCs per one million population has been calculated based on population figures as per Census 2011. Population figures are taken for further years based on CAGR. 11 All available data has been included.

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Increase in departmental expenditure can be attributed to increase in both plan and non-plan expenditure. The table given below shows the CAGR of plan and non-plan expenditure of the department for the last three years. Plan expenditure is growing at a quite high rate i.e. 94%, due to a huge growth in CSS. Non plan expenditure is registering a decent growth i.e. 21%, relatively. Growth in plan expenditure indicates an increased focus of the state to undertake bigger agenda for developmental projects/ programs.

Table 20: Trend growth in components of department expenditure for the period 2012-13 to 2014-15 (RE), DOH&FW

Category CAGR Plan 94% State plan 44% CSS 427% Center sector 30% Non Plan 21% Total departmental expenditure 35% Source: IFMS, various years

Table 21 shows the share of plan and non-plan expenditure in the total expenditure of the department for the period 2012-13 to 2014-15 (RE). Share of plan expenditure is same for 2012-13 and 2013-14, but it has doubled for 2014-15 (RE). The improvement in the plan expenditure shows the commitment of government towards welfare of the people.

Table 21: Share of Plan and Non Plan Expenditure in Total Expenditure- DoH&FW

2014-15 Major Head 2012-13 2013-14 (RE) Plan 16% 16% 32% Non Plan 84% 84% 68% Source: IFMS, various year

Table 22 reflects low utilization of budget allocated under the account of ‘capital outlay for medical and public health’ in the past three years. This is because PWD submits utilization certificates for all capital works post completion of the project which usually extends beyond a year. Hence, the running expenses under any capital project during the year is not accounted in the same year as when it is incurred but is accounted in the year in which the project is completed.

Table 22: Actual expenditure as a % of BE under capital account, DoH&FW, Punjab

Major Head Description 2012-13 2013-14 2014-15 (RE) Capital Outlay in Medical 4210 8% 8% 1% and Public Health Source: IFMS, various years

Sources of funds for the department

The main sources of funds for DoH&FW that are channelled through the department budget are funds from Government of India and funds from the state government. The center provides funds to the state through Central Sector Schemes and CSS. In case of CSS the states are required to share a part of the cost, as in the case of schemes under NRHM. In case of Central Sector Schemes, the concerned ministries of the central government give 100% grants to their counterparts in the states for specified projects.

3.4.1.5 Scheme Review As was mentioned in sub-section 2.2.2, a limited review was carried out for schemes which impact performance on those indicators where the State’s performance is assessed as weak. It may be noted that primary data was not collected through any sample surveys as this is entirely outside the purview of MTEF preparation - for that

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purpose, separate Public Expenditure Tracking Surveys (PETS) and Impact Evaluation Studies (IES) are conducted. Below observations are based on the discussions and feedback received from select concerned officers.

Maternal & Child Health Care: MMR double of what exists in Tamil Nadu; intensive efforts required to address the low child sex ratio- a possible list presented below:

• Study to be conducted to understand the spread and penetration of ANC care services and institutional deliveries • Balri Rakshak Yojna: No funds allotted in FY 2014-15 & FY 2015-16. Given the highly skewed child sex ratio, may consider re-designing the scheme by de-linking the two goals of family planning (i.e. conditional sterilisation after having 2 children) & improved child sex ratio (monetary benefits on birth of girl child). Touring by Ministers/ MLAs in highly affected areas to create mass public awareness with adequate supported from CSOs suggested

• Implement PNDT Act more stringently through measures, e.g. enhanced vigilance in private facilities; registering all sex-detection machineries; ensuring timely punishment of defaulters

Towards Full Immunization:

• Study to be conducted on factors explaining decline in trend of full immunization • Need for increased monitoring to identify and correct drop out at any stage of vaccination before completion of full course of immunization At an overall level, it may be a worthwhile idea to explore if the Department has one dedicated team for carrying out awareness campaigns on the entire of topics/ issues. To ensure sustainability of such a crucial activity, a budget can be earmarked on an annual basis.

3.4.1.6 Institutional Review Based on review of administrative setup/ organizational structures, departmental functions and its processes, following recommendations are proposed:

 Subsidiary Health Centers to be merged with Sub-Centers

 Study to be conducted to understand the relative importance of demand & supply side considerations to explain the higher preference for private health facilities and resultant lower utilization of public facilities

 Greater exploration of PPP models in healthcare facilities (as envisaged under the proposed National Framework for PPP in health in India)

3.4.2 Suggesting reform interventions and estimating associated cost implications This section presents the interventions proposed to address the issues identified in foregoing sections. It also discusses the methodology undertaken to cost the expenditure estimates for these suggested interventions for the MTEF period from 2016-17 to 2018-19. Some of the interventions have not been costed because of reasons stated therein.

3.4.2.1 Increase density of primary healthcare facilities The state lags behind in the number of SCs and PHCs as compared to the national average. However, it is well above in terms of CHCs as compared to the national average. While designing intervention, national average statistics have been taken as the benchmark.

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Table 23: Population based density of primary healthcare infrastructure in Punjab and India

Area Level SC PHC CHC Punjab Population served per 6,016 41,580 1,18,363 National Average Population served per 5,669 34,514 1,61,019 Source: Rural Health Statistics, 2014 Note: Population of the state for 2014-15 has been projected based on CAGR of the state population over the period 2001 to 2011 (Source for data on population: Census 2001 and 2011)

Main beneficiaries from the services provided by SCs and PHCs constitute the rural population of Punjab. Since Punjab lags behinds the national average density of SC and PHCs, hence it is proposed to move towards meeting these averages in a phased manner. Taking a realistic view, it is suggested that the DoH&FW construct these health facilities to meet the present national average levels of 2018 by the end of the MTEF period, i.e. 31st March 2019.

Going by above rationale, the health facilities proposed to be constructed by 2018-19 are SCs: 280; PHCs: 104 in the State. It is assumed that one-third of these facilities will be constructed every year during 2016-18. Existing norms used for estimating the costs for construction of the required facilities are:

 Average cost of construction per SC= INR 0.6 million (As per PIP 2015-16)  Average cost of construction per PHC= INR 10.0 million (As per PIP 2015-16)  Rural population of Punjab in 2011 = 17.34 million (as per Census 2011)  Rural population of India in 2011 = 8340 million (as per Census 2011)  CAGR for rural population of the state= 0.78% (calculated based on Census 2011 and 2001 figures)

Formulae used for estimating the costs for construction of the required facilities to meet the national average are:

1) Total number of the facilities reqd. to meet present national average by March 2019 = (Rural Population of Punjab by 2018/Rural Population per facility at National Level

2) Additional number of facilities reqd.= Total number of the facility reqd. to meet present national average by March 2019- present number of the facility in the state (as per Rural Health Statistics 2014)

3) Cost of construction of the facility per year during the MTEF period = (Additional number of the facility reqd. x Average cost of construction of the facility)/ 3

Cost estimates for construction of primary health care facilities to meet the national average by the end of MTEF period allocation is presented in Table 24.

Table 24: Cost projections for construction of primary health facilities

India Average Punjab Cost (in INR million) Health Facility (population served status (RHS 2016-17 (P) 2017-18 (P) 2018-19 (P) per center) 2014) Sub-Center (SC) 5669 6016 56 56 56 Primary Health 34514 41580 345.7 345.7 345.7 Center (PHC) Total 401 401 401

Since no plan scheme under capital head of account (4210) caters to construction of SCs, PHCs and CHCs. A new scheme is proposed to be introduced- ‘Construction of SCs and PHCs’, for which head of accounts is to be decided by the state. The cost estimates under this scheme may be added to the concerned major budget head ‘4210’.

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Further, greater focus is suggested to be given to the districts of Jalandhar, Ludhiana, Mohali and Amritsar.

3.4.2.2 Recruitment of doctors and nurses As per the Government of India norms, the doctor-population and nurse-population ratios in the country should be 1:1,000 and 1:500 respectively.12 The ratios in the state at an overall level stand at 1:678 and 1:362 respectively as revealed by source of the Medical council of India, 2013. Thus, while the State has more number of health practitioners as compared to other states, however, cause of concern is their low availability at some of the rural area. Government is spending appreciably in health sector and the plenty number of doctors and nurses vindicate the fact, but it is imperative to use the resources judiciously such that every part of the state can benefit.

However, the scenario is completely different in case of homeopathy and Ayurveda stream of healthcare. As informed by government officials while state is getting appreciable amount from center to build facilities, but the facilities are remaining non-functional due to manpower scarcity. Both the streams have urgent requirements of recruitment of doctors and supporting staff. Based on the information provided by the respective department the salary expenditure is thus forecasted.

i. Directorate of Homeopathy In this section, salary expenses are estimated for the additional requirement of doctors and other staff. The relevant data have been provided by the Directorate of Homeopathy officials. Initial salary at each level is considered for estimating the additional salary expenditure. Assumptions used for assessing the additional cost involved in paying the salaries to extra doctors and staff:

 District health officer monthly salary = INR 41,875 (As per department officials)  Homeopathy medical officer monthly salary = INR 41,875 (As per department officials)  Dispensers monthly salary = INR 18,925 (As per department officials)  Required number of District Health Officers, Homeopathy Medical Officers & Dispensers are 3, 48 & 10 respectively (As informed by department officials)  Annual average salary growth rate for Punjab is 12%

Formulae used for estimating the salaries paid to the additional doctors and staff:

1) Additional burden on the exchequer in INR million for 2016-17 = (Extra doctors or staff x initial salary of doctor or staff x 12)/10^5 2) Additional burden on the exchequer in INR million for 2017-18 = salary expenses for 2016- 17*(1+average annual salary growth rate)

The total salary expenses for the three target years 2016-17, 2017-18 and 2018-19 are INR 27.9 million, INR 31.2 million and INR 35.0 million respectively.

Table 25: Additional burden on the exchequer towards salary payment to the Directorate of Homeopathy (in INR million)

2016-17 2017-18 2018-19 Category of Staff (P) (P) (P) District Health Officer 1.5 1.7 1.9 Homeopathy Medical Officer 24.1 27.0 30.3 Dispensers 2.3 2.5 2.9 Total 27.9 31.2 35.0

12 Source: High Level Expert Group (HLEG) Report 2011-12, Planning Commission of India

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ii. Directorate of Ayurveda In this section, salary expenses are estimated for the additional requirement of doctors and other staff for the Directorate of Ayurveda. The relevant data has been provided by the department officials. Initial salary at each level is considered for the estimating the additional salary expenditure.

Assumptions used for assessing the additional cost involved in paying the salaries to extra doctors and staff:

 Doctors monthly salary = INR 41,875 (As per department officials)  Upwaidya monthly salary = INR 18,925 (As per department officials)  Fourth grade staff monthly salary = INR 11,472 (As per department officials)  Required number of Doctors, Upwaidya and Fourth grade staff are 48, 48 and 48 respectively (As informed by department officials)  Annual average salary growth rate for Punjab is 12% .

Formulae used for estimating the salaries paid to the additional doctors and nurses:

 Additional burden on the exchequer in INR million for 2016-17 = (Extra doctors or staff x initial salary of doctor or staff x 12)/100,000  Additional burden on the exchequer in INR million for 2017-18 = salary expenses for 2016- 17*(1+average annual salary growth rate)

The total salary expenses for the three target years 2016-17, 2017-18 and 2018-19 are INR 41.6 million, INR 46.6 million and INR 52.2 million respectively.

Table 26: Additional burden on the exchequer towards salary payment (INR million)

2016-17 2017-18 2018-19 Category of staff (P) (P) (P) Doctors 24.1 27.0 30.3 Upwaidya 10.9 12.2 13.7 Fourth Grade 6.6 7.4 8.3 Total 41.6 46.6 52.2

3.4.2.3 Enhance quality of services in rehabilitation centers Although every district has one de-addiction center, many of them are non-functional (only 6 of the rehabilitation centers are functional). Hence, it is imperative for the government to make them functional to cater to the increasing needs of the state. Assumption and information involved in estimating the additional expenses required to operationalize the required number of rehabilitation facilities:

 No. of IPD patients in 2014-15 is 6328; the number of IPD patients are supposed to increase at the rate at which the state’s population grow i.e. 1.34%  Average period of rehabilitation assumed to be 3 months for a patient; % of IPD patients needing rehabilitation assumed to be 50%

 No. of doctors, nurses & fourth grade staff per facility assumed to be 5, 8 & 10 respectively

 Equipment's per facility assumed to be 2, @ INR 0.5 million each

 Functional 50 bedded government rehabilitation centers – 6 (As informed by department officials)

 Total number of rehabilitation centers in the state – 22 (As informed by the department officials) Formula used to calculate the additional salary expenses to make the required number of facilities functional:

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 Number of IPD patients in the next period = Number of IPD patients in this period * (1+population growth rate)  Total number of required bed = (Number of patients by 2018-19 * percentage of IPD patients needing rehabilitation facilities)/ (Months in a year (12)/required period of rehabilitation in months for a patient)  Additional bed required = Total number of required bed – presently available beds (50*6)  Additional number of 50 bedded rehabilitation facilities = Additional number of beds/50  Annual salary expenditure for staff = monthly salary of the staff * number of months in an year (12) * number of staff per facility * number of additional required facilities  Annual expenditure on equipment’s = (number of equipment per facility * cost per equipment * number of additional facilities)/3  Total expenditure in a year = Annual salary expenditure for staff + Average Annual expenditure on equipment’s. Thus, it is estimated that INR 64.5 million annually is needed to operationalize the required 11 facilities.

Table 27: Estimated expenditure (on salaries) on operationalizing additional rehabilitation centers (in INR million)

2016-17 2017-18 2018-19 Staff category (P) (P) (P) Doctors 26.8 26.8 26.8 Nurses 19.4 19.4 19.4 Fourth Grade 14.7 14.7 14.7 Equipment 3.5 3.5 3.5 Total 64.5 64.5 64.5

3.4.3 MTEF projections – Reform scenario The various interventions proposed and costed above for the MTEF period during 2016-17 to 2018-19 are summarily presented in below Table 28.

The additional expenditure proposed to be incurred by the state for the suggested reforms over baseline/ trend scenario projections in the years 2016-17, 2017-18 and 2018-19 are INR 535.7 million, INR 544.1 million and INR 553.4 million respectively.

Table 28: Bottom-up Projections of Costed Reform Interventions in DoH&FW (in INR million)

2016-17 2017-18 2018-19 S. No. Proposed Reform Intervention (P) (P) (P) 1 Construction of SCs and PHCs 401.7 401.7 401.7 Recruitment of doctors and staff in 2 27.9 31.25 35 homeopathy Recruitment of doctors and staff in 3 41.63 46.62 52.22 Ayurveda 4 Operationalizing rehabilitation facilities 64.5 64.5 64.5 Additional Costed Reform A 535.7 544.1 553.4 Interventions (1+2+3+4) B Baseline/ Trend MTEF Projections 30,590 33,780 37,320

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3.5 Reconciliation and Reprioritization

It is necessary to reconcile ‘bottom-up’ expenditure requirements with ‘top-down’ estimation of resource availability for the department to assess their affordability. This has been presented in Table 29. The projected resource envelope shows that it is adequate to meet trend projection expenditure in the final year of projection only [S.nos. 1 and 2a]. Also, the costed reform interventions are not affordable by the top-down projected resource growth in the first and second year [S.Nos. 1 and 2].

In view of above, a re-prioritization exercise was carried out to cut down allocations in those inefficient schemes wherein utilization has been critically low in the past. Analysis of data revealed that the average utilization (difference between BE versus actuals) rates in plan and non-plan schemes are 80% and 97% respectively. These averages have been calculated for the years 2012-13, 2013-14 and 2014-15. In case of CSS, the percentage is calculated only for 2014-15, as the previous year’s figures are very different.

Table 29: Reconciliation and reprioritization of projected expenditure with projected resources available to DoH&FW for the period 2016-17 to 2018-19 (in INR million)

2014-15 2015-16 2016-17 2017-18 2018-19 S. No. Head (Rs in crores) (RE) (P) (P) (P) (P) Top-down budgeting: Departmental 1 25,377 23,889 28,512 34,013 40,695 Resource Envelope 2 Bottom-up budgeting 25,385 28,394 28,596 31,536 34,808 Of which: women component - - 2,188 2,580 2,838 3,121

Bottom-up budgeting: Baseline 2.a) 25,385 28,394 30,588 33,776 37,322 Scenario Expenditure Requirements

Plus: Costed Additional Reform 2.b) - - 536 544 553 Interventions Of which: women component ------

Savings as per projecting on past 2.c) - - 2,528 2,784 3,068 utilization rates 3 MTEF deficit (-)/ surplus (+) (4,505) (84) 2,477 5,887 Reconciled MTEF Projections (after 4 deliberations with Department of 25,385 28,394 28,596 31,536 34,808 Finance) 4.a) Reconciled Plan 8,237 9,468 8,249 9,029 9,889 Of which: women component- - 2,188 2,580 2,838 3,121

4.b) Reconciled Non-Plan 17,149 18,926 20,347 22,507 24,919

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4 MTEF for School Education Department

This chapter presents the MTEF prepared for the School Education Department, Govt. of Punjab for the FY2016-17, thus also containing forward estimates for FY2017-18 and FY2018-19. 4.1 Long-term sector strategy & departmental objectives

School Education Department, which is responsible building and maintaining elementary, secondary and Senior Secondary education in the state is committed to providing good quality infrastructure and hygienic environment in schools. It plays an eminent role in the overall development of all pupils studying in schools.

School Education, Punjab

Elementary

Primary Upper Primary Secondary Senior Secondary Class I-IV Class V-VIII Class IX- X Class XI- XII

Before presenting the long-term strategy and departmental objectives, overall structure and organisation of the department are presented.

Administrative Set Up: School Education in the State of Punjab is managed by the Director Public Instruction Elementary and Secondary Education and headed by the Director General of School Education. Teachers’ Training and quality of education is the responsibility of the State Council of Educational Research Training (SCERT). It consists of the following entities:

 Director Public Information Elementary Education: The Director Public Information- Elementary Education (DPI-EE), headed by the Director Elementary Education, is entrusted with all executive functions concerning primary school administration and is responsible for regular monitoring and supervision of schools through District Education Officer (DEO-EE) of Elementary Education.

 Director Public Instruction Secondary Education: The Director Public Instruction Secondary Education (DPI-SE), headed by the Director Secondary Education, is entrusted with all executive functions concerning secondary and senior secondary school, administration and responsible for regular monitoring and supervision of schools through District Education Officer (DEO-EE) of Secondary Education.

 Planning and Budget Secondary Education: Planning and budget department is headed by Officer on Special Duty (OSD) Planning and is involved in developing new scheme, planning and preparation of budget for secondary education as well as elementary education. It also coordinates with other departments for new state plan schemes.

 Punjab School Education Board: The Punjab School Education Board’s functions is very wide and covers almost every aspect/stage of school education. However, a brief account of functions, structure and activities of the Board is enumerated as below:

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a. To make necessary arrangements for smooth conduct of public examination at school level. At present, the Board conducts public examinations at Middle, Matriculation and Senior Secondary Level. b. To prescribe the curriculum, courses of studies and text books for school education. The Board has a full- fledged academic wing, having subject experts in all the major subjects. The main responsibility of this wing is to prepare and revise the syllabuses regularly and then prepare text books accordingly. c. To arrange for the preparations, compilation, improvement, publication, printing and sale of text books. d. To make necessary arrangements for affiliations of schools to the Board. e. To make efforts to bring about qualitative improvement in school education. f. To act as an advisory body to the state Govt. regarding School Education.  State Council of Educational Research & Training (SCERT): State Council of Educational Research and Training (SCRET) Punjab, Chandigarh, came into existence in July 1981 as a Nodal Agency for bringing qualitative improvement in School Education. Survey and Data processing Unit, Evaluation Unit, Audio Visual and Educational Technology Cell, State Bureau of Educational and Vocational Guidance, State institute of Science Education are the units that function under the administrative control of director SCERT. SCERT has greater role in Punjab than the other states. The objective of the SCERT includes:

a. To bring about improvement in the present educational system in the fields of education. b. To undertake and promote investigation, surveys, studies and researches in various fields of education. c. To provide pre and in-service training of teachers and educational supervisors. d. To formulate and implement pilot project for bringing about qualitative improvement in different fields of education. e. To develop new techniques and methodology in the field of school education. f. To introduce and implement new policies of Center/States. g. To evaluate monitor and develop the educational programs. h. To develop syllabi and curricula of various subjects at school stage. i. To provide career guidance and counseling to school students. j. To conduct research and qualitative improvement in school education k. To develop and revise curriculum for Elementary Teachers Training (ETT) course l. To conduct admission in DIETs/District Resource Centers (DRC) and Private Colleges to ETT course. m. Conducting Semester examination of ETT course. n. To conduct Teacher Education Training (TET) Test in the state o. To provide affiliation to Private Colleges for ETT Course.

 Punjab Education Development Board: The Punjab Education Development Act, 1998, was amended in the year 2007 to establish Adarsh schools in the State of Punjab. The Punjab Education Development Board was established in January 2008, with the objective to establish Adarsh Schools in the State, to provide free and quality education to the poor and needy students. Total 119 + 9 = 128 sites have been identified to open Adarsh Schools from pre-Nursery to 10+2 classes. Under the Public Private Partnership Mode, 24 Adarsh Schools are being run in the State. The source of Income to run this scheme is the education cess levied on the liquor which is collected by the Excise and Taxation Department.

 Open Schooling: This institution aims to impart non-formal education to groups such as children of school-going age, persons who have dropped out of schools and those who cannot be reached by the formal school education system.

 Department of Scholarship: Department of scholarship manage and distribute scholarship of Department of School Education, scholarship from social welfare department and scholarship received from the center.

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 Punjab ICT Education Society: Information Communication Technology (ICT) Education Project has been started by the state government with the aim to impart computer education to all students of class VI to XII.

 Punjab EDUSAT Society: The Govt. of Punjab has set up Punjab EDUSAT Society for providing quality education to the Govt. educational institutions of Punjab. It includes department of school education, higher education, technical education and medical education. The EDUSAT network was dedicated to the State on 02.01.2008 by the Hon'ble Chief Minister, Punjab. Punjab EDUSAT Society has set up one Hub and three studios in the premises of Punjab School Education Board from where independent programs of Higher Education as well as Technical Education are being broadcast. All the three studios have been equipped with the State of the Art equipment and peripherals.

 Society for Promotion of Quality Education for Poor and Meritorious Students: Punjab govt. has opened seven meritorious schools at Amritsar, Bhatinda, Jalandhar, Ludhiyana, Patiyala, Mohali and Talwara Township under the “Society for Promotion of Quality Education for Poor & Meritorious Students of Punjab” for student from Government school who has scored more than 80% marks in Matric. Each school has living capacity of 1000 students. The objective of the school is to place deserving students into professional colleges at the all India level.

 Societies have been set for each CSS flagship scheme:

1. Mid-Day Meal Society Punjab 2. Sarva Shiksha Abhiyan Authority Punjab 3. Rashtriya Madhyamik Shiksha Abhiyan Authority Punjab

 At the district level, there are district education officers (DEOs) for each directorate, DPI (EE) & DPI (SE):

o District Education Officer Elementary Education DEO (EE): The DEOs are involved in final approval of selection of teachers and preparation of annual budget demand for the DPI-EE, posting and transfer of teachers, preparation of pension papers, maintenance of GPF accounts, maintenance of new contributory provident fund scheme, maintenance of group insurance accounts, preparation of recurrence expenditure, engaged in managing fund released by DGSE for the construction of new building and maintenance and providing other facilities like water management, urinal maintenance in schools, preparing a report proposing all the problems faced by the schools in districts and directly reporting to the DGSE.

o District Education Officer Secondary Education DEO (SE): The DEOs of secondary education are involved in final approval of selection of teachers, preparation of new scheme for Senior Secondary and preparation of annual budget demand for the DPI-SE.

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Figure 2: Institutional set up of DSE, GoP

Department of School Education

Directorate SCERT Autonomous bodies

DPI (SE) DPI (EE) DIET SSA

DRC RMSA Circle Education Officer

PICTES

District Education Officer (SE and EE) EDUSAT

PEDB Head of SS & SSS Block Project Officer (BPEOs) MDM

Source: http://www.ssapunjab.org/ and (School Education Website)

MTEF has been prepared for the DSE for three years which includes the budget year as the first year (2016-17), and then budget estimates for the two outer years, viz. 2017-18 and 2018-19. 2018-19 and 2017-18 are referred to as the outer years of the three-year period and the budget estimates for these years are technically called “forward estimates”.

MTEF is prepared keeping in view the overall long-term strategies adopted by the GoP for the concerned planning sector, i.e. ‘Social Services’ as captured in its Five-Year Planning exercise and the Vision of the Department. In this context, it may be useful to present an overview of the sector and the DSE.

An analysis of past spending in the three recent most Five-Year Plans (FYPs) clearly suggests an ever-increasing focus being laid by the GoP on the Social Services sector.

Table 30: Allocation under Social Services sector out of total allocated funds under FYP

Share of Out of Social Allocation (INR Million) Social Services FYP Social Services in Total Outlay Education Services total outlay 12th FYP13 (2012-17) 359,440 921,000 40.51% 29.5% 11th FYP14 (2007-12) 99,020 289,230 34.23% 21.5% 10th FYP15 (2002-07) 48,583 186,570 26.04% 32.9% Source: Draft 12th FYP, 11th and 10th Five-Year Plans, GoP

As can be seen from Table 30 above,

13 Approved Outlay 12th Five-Year Plan 2012-17 and Annual Plan 2012-3 14 Ibid 15 Sub-head Wise Outlay and Expenditure, 10th Five-Year Plan (2002-07)

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 Compositional share of the Social Services sector has increased by more than 50% since the 10th FYP and stands at 41.69% in the 12th FYP.

 Within Social Services sector, share of education has decreased significantly from 32.9% in 10th FYP to 21.5% in 11th FYP.

However, the share of education within the Social Services sector has experienced a substantial increase in 12th FYP (2014-15) period which is also evident from the annual increases in Annual Plans as shown in below Table 31.

Table 31: Share of approved outlay under social services across different years

SOCIAL SERVICES 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Education 25.05% 31.06% 32.15% 27.25% 27.63% 29.41% Other Social Services 74.95% 68.94% 67.85% 72.75% 72.37% 70.59% Source: Annual Plans, GoP, Various years

Further, in terms of utilisation, actual expenditure as a percentage of approved outlay under Social Services sector declined over the period 2010-11 to 2013-14 from 91.25% in 2010-11 to 47.81% in 2013-14. However, utilisation of approved outlay in education sub-sector has increased over the period 2011-12 to 2013-14. Spending out of approved outlay in the respective annuals plans for education increased from 65.40% in 2011- 12 to 78.13% in 2013-14.

Table 32: Actual utilisation of allocated funds under Annual Plans in Education sector (%)

Sector 2009-10 2010-11 2011-12 2012-13 2013-14 Education16 78.50% 96.08% 65.40% 75.35% 78.13% 1. General Education 80.38% 104.88% 68.29% 82.69% 86.87% 2. Technical Education 51.27% 65.74% 60.62% 22.88% 7.08% 3. Sports & Youth Services 18.68% 62.41% 25.05% 44.30% 20.99% 4. Art & Culture 277.59% 60.59% 60.27% 9.18% 54.52% TOTAL- SOCIAL SERVICES 66.03% 91.25% 69.74% 51.82% 47.81% Source: Annual Plans, GoP, Various years

It may be noted that Education sub-sector includes General Education, Technical Education, Sports & Youth Services and Art & Culture. Majority of the DSE’s expenditure is accounted under General Education. Thus, increase in utilisation of approved outlay under General Education over the period 2009-10 to 2013-14 (barring 2011-12) can serve as a proxy for more effective utilisation of approved outlay by DSE.

The goal of the Department of School Education is to ensure 100% net enrolment ratio (NER) for primary, upper primary and secondary education by 2014-15 while simultaneously enhancing the quality of learning in the state17. Objectives of DSE in order to achieve the above stated goal are as follows:

 To bring qualitative improvement in the field of school education o Setting up of new schools o Up-grade existing schools o Reducing the gap between male and female literacy o Technological intervention after elementary level  To achieve 100% Gross Enrolment Ratio (GER), 100 % NER, Zero drop out and 100% retention o Reduce drop-out rates and improve retention rate

16 Education includes General Education, Technical Education, Sports & Youth Services, and Art & Culture 17 Department of School Education Website:

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o Ensure enrolment at the Senior Secondary level of all students who pass secondary level o Ensure 100% enrolment of girls students especially from backward, reserved and remote areas

 To implement Right to Free and Compulsory Education Act in the state in letter and spirit. o Ensure separate toilets for girls and boys o Ensure drinking water facility and water for other use o Equip all Senior Secondary schools with library and laboratory facilities

 To fill all vacant posts in schools and colleges  Overall development of government schools and higher institutions.

4.2 Top-Down Budgeting- Estimation of Resource Envelope

Estimating ‘Resource Envelope’ involves projecting the likely availability of resources in the future within which the department is expected to fit in its expenditures. The methodology has already been discussed in Chapter 2. The analysis and results are discussed here for the DSE.

4.2.1 Step I: Fiscal Policy Resource Ceiling for State Total Expenditure Projections for all three sources of government receipts viz. (1) revenue receipts, (2) non-debt capital receipts and (3) fiscal deficit (net of debt receipts) have been taken from the Medium Term Fiscal Framework (MTFF) prepared for FY 2016 to FY 2018.

Table 33: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (INR million)

2014-15 2015-16 2016-17 2017-18 2018-19 S. No. Item Basis expected* expected* (P) ** (P) (P) 1 Total Revenue Receipts 390,230 MTFF 456,480 494,084 535,190 580,154 2 Non-debt Capital Receipts 1,184 MTFF 1,248 1,311 1,376 1,445 Fiscal Deficit (Net Debt 3 109,165 MTFF 121,077 128,835 124,834 128,633 Receipts) Fiscal Policy Resource 4 Ceiling for State Total 500,579 578,806 624,230 661,401 710,232 Expenditure (1 + 2 + 3) * Base year for MTFF projections is expected estimated for FY 2015-16 (data as provided by the Department of Finance, Govt. of Punjab) for all except for two revenue items of: (a) state lottery, (b) recovery of loans & advances, and three expenditure items of: (c) salary, (d) pension and (e) loans and advances given by State Government for which the base year is expected estimates for FY 2014-15. ** P within brackets, i.e. (P) in this report denotes the projections made

4.2.2 Step II: Sectoral State Plan Resource Ceiling Resource Ceiling for State Plan in the concerned Social Services Sector has been arrived at in the following way18:

5. Resource ceiling for ‘Total Plan’ expenditure in the state is estimated for MTEF projections period, FY 2016-19 by extrapolating the historical share of 22.61% of total plan expenditure sourced from State’s Annual Plan in the values of S.No.4 above.

18 Ideally, average historical share for at least 3 years should be considered to take care of any outliers/ spikes. However, due to unavailability of detailed data from Annual Plans of the State, the historical share has been considered for only one year 2014-15 RE in this exercise.

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6. Resource ceiling for General Education Sub-Sector in Total Plan expenditure resource ceiling during 2016- 19 is estimated by extrapolating its historical share of 10.88% of 12th five-year program (2012-17) in the projected figure in S. No. 6.

Table 34: Estimation of Resource Ceiling for State Plan in General Education (in INR million)

2012-13 2015-16 2016-17 2017-18 2018-19 S. No. Item (Annual Basis (P) (P) (P) (P) Plan, AP) Affordable Resource Envelope Historical 5 for State Plan Expenditure 113,180 share (AP)- 130,867 141,137 149,541 160,582 (proportion of 4) 22.61% Affordable Resource Envelope Historical 6 for General Education Sub- 18,750 share (AP)- 14,233 15,350 16,264 17,465 Sector (proportion of 5) 10.88%

4.2.3 Step III: Departmental MTEF Plan Budget Resource Ceiling 7. Projections for State plan schemes in DSE is estimated during FY 2016-18 by extrapolating its historical share (2014-15 RE) of 19.69% in the values of affordable resource envelope for general education sub-sector as calculated in S.No.6 above.

8. Resource availability from center (CS+CSS) for DSE is then extrapolated on its historical share of 61.93% (2014-15 RE) (proportion of 6).

9. Non-plan resource ceiling for the department is projected based on the historical trend growth of budget estimates for non-plan expenditure for the period 2012-13 to 2014-15 (RE).

Total resource ceiling for the department is then calculated by summing up the estimated resource availability of the department for state plan schemes (7), Resource availability from center (CS/CSS) (8) and non-plan expenditure (9).

The total likely resource availability for DSE for the next three years is presented in Table 35.

Table 35: Estimation of MTEF Budget Resource Ceiling for DSE (in INR million)

S. 2014-15 2015-16 2016-17 2017-18 2018-19 Item 2013-14 Basis No. (RE) (P) (P) (P) (P) Affordable RE for Historical State Plan share in 7 5885 3,692 2,802 3,022 3,202 3,439 Expenditure for DSE 2012-13: (proportion of 6) 19.69% Projected Resource Historical Availability from share in 8 5,245 11,612 8,815 9,507 10,073 10,817 Center for DSE 2012-13: (CS/CSS) 61.93% Projected Non Plan 9 39,563 55,647 7.75% 59,961 64,609 69,618 75,014 Expenditure MTEF Resource 10 Envelope for DSE 51,184 70,430 71,578 77,138 82,893 89,270

(7+8+9)

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4.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario

The first step under bottom-up budgeting is estimating the expenditure requirements of the DSE based on the trend observed in the past years. Expenditure projections based on trend indicates the expenditure requirement that need to be incurred for continuation of the current schemes and sustain current level of performance indicators in service delivery at the historical rate.

4.3.1 Basis used for projections Trend scenario projections for the schemes under DSE for the next three-year period, i.e. FY 2016-17 to FY 2018-19 using 2014-15 (RE) as the base year have been done as follows:

4.3.1.1 Schemes assumed to be in continuum, projected at object head level  Salaries and Wages (Object head- 01): Projections for salaries and wages have been done in accordance with the state’s average annual growth in salaries over a period of 12 years. The average growth rate comes out to be 12%.

 Inflation Based Projection: Expenditure under the Object Head such as Domestic Travel Expenses, Office Expenses, Rents, Rates, Taxes, Publications, Other Administrative Expenses, Supplies and Materials, Cost of Ration, Advertising And Publicity, Minor Works, Maintenance, Motor Vehicles, Machinery And Equipment, Major Works, Telephones, Electricity Charges, Water Charges and Computerisation have been projected using inflation rate. Inflation rates have been applied at the rate of 5.25%; in August 2015, inflation was 5.25%. Thus, we assume the inflation rate to be 5.25%. Expenditure under the above-mentioned object heads have been projected year-wise by applying the inflation rate on previous year’s allocation.

 All other Object Heads:

o Except for above mentioned, all other Object Heads under each scheme have been projected based on their own historical trend growth rates observed during 2010-11 to 2014-15 (RE).

o In cases where the trend growth rate is found to be negative or erratic or too high/low, the projections have been made based on the trend growth rates observed in the expenditure category of the department to which they belong, i.e. non-plan, plan. The trend growth rates, hence, taken are shown in Table 36 below:

Table 36: Trend growth rates used in baseline projections

Trend growth rate for the period of 2010-11 Head to 2014-15 (RE) Overall Departmental Expenditure 15% Overall Departmental Non Plan Expenditure 10% Overall Departmental Plan Expenditure 32% Salary and Wages Growth 12% Rule of thumb Growth Rate 10% Inflation 5.25%

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4.3.1.2 Schemes to be discontinued during the projection period, 2014-17  Under the ‘Financial assistance to the State under 13th CFC for implementation of Sarv Shiksha Abhiyan Program’, expenditure for all ensuing years have been projected to be zero since the scheme has no allocation for 2015-16 onwards.

 There are many schemes for which no fund has been allocated for the 2014-15 RE and 2015-16 BE. The DSE keeps one hundred thousand of token amount to keep schemes alive. These schemes assumed to be discontinued if there are no allocations. Though we have kept those schemes in our projection file but not projected.

4.3.2 Expenditure Projections under Trend Scenario Table 37 presents the Plan MTEF projections for DSE at scheme (SOE) level for the next three years based on the assumptions specified in Section 4.3.1. Inclusive in these projections is the current status of delivery of services by the department, i.e. projections have been made assuming that the department will continue delivering services at the present level. Table 39 represents the Non-plan MTEF projection for DSE.

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Table 37: MTEF Projections- Trend Scenario (Plan) (INR million)19

Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * MH SMH Mh SOE (RE) (BE) (P) (P) (P) (P) SP 2202 1 101 31 Implementation of EDUSAT Project in the State- 8.3 8.6 9.3 10.4 11.7 13.1 (Previously NABARD) SP 4202 1 201 31 0.0 0.0 0.0 0.0 0.0 0.0 SP 4202 1 201 50 0.0 0.0 0.0 0.0 0.0 0.0 SP 4202 1 201 53 39.7 5.0 52.3 69.0 90.9 119.9 SP 2202 1 789 36 3.2 6.4 4.2 5.6 7.3 9.7 SP 2202 1 789 42 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 789 50 0.0 0.0 0.0 0.0 0.0 0.0 SP 4202 1 789 53 28.8 0.0 38.0 50.0 66.0 87.0 SP 2202 1 101 36 Providing furniture for students at primary level in 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 789 36 government schools 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 101 31 Provision for deficit budget to meet the enhanced 54.7 0.1 61.2 68.6 76.8 86.0 SP 2202 1 789 1 honorarium of education volunteers (Sikhya Karmies) 0.0 0.0 0.0 0.0 0.0 0.0 under SSA Program (Salary) SP 2202 1 789 31 18.2 0.0 20.4 22.9 25.6 28.7 SP 2202 1 789 36 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 101 31 Provision for deficit budget to meet the enhanced 319.1 225.0 357.4 400.3 448.3 502.1 SP honorarium of special trainers under SSA Program 2202 1 789 31 106.4 75.0 119.1 133.4 149.4 167.4 (Salary) SP Provision for Salary of Inclusive Education Volunteers 2202 1 101 31 48.0 0.1 53.8 60.2 67.5 75.6 (IEV) Under SSA Program (Salary) SP 2202 1 101 36 Provision of utensils for students for MDM 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 789 36 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 101 50 State support for Inclusive Education for Disabled at 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 109 36 Secondary Stage (IEDSS) 0.0 3.2 0.0 4.2 5.5 7.2 SP 2202 1 789 36 5.1 1.5 6.7 8.8 11.6 15.3 SP 2202 1 789 50 0.0 0.0 0.0 0.0 0.0 0.0 SP Creation of new posts in the schools under 2202 2 109 1 0.0 0.0 0.0 0.0 0.0 0.0 rationalization policy - (Salary)

19 Please note: MH- Major Head/ SMH- Sub-Major Head/ mh- Minor Head/ SOE- Scheme Object Expenditure / CSS- Centrally Sponsored / CS- Central Sector Page 71 of 153

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Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * MH SMH Mh SOE (RE) (BE) (P) (P) (P) (P) SP 2202 2 109 36 Dr. Hargobind Khurana Scholarship for brilliant 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 789 34 students 0.0 32.0 0.0 42.2 55.6 73.3 SP 2202 2 107 34 60.0 68.0 79.1 104.3 137.4 181.1 SP 2202 2 109 50 Improvement of laboratory infrastructure by 0.1 0.1 0.1 0.1 0.1 0.1 SP 4202 1 202 53 providing science material in 351 schools upgraded 0.0 0.0 0.0 0.0 0.1 0.1 under NABARD-RIDF-XVI (85:15) SP 2202 2 789 50 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 109 31 Information and Communication Technology (ICT) 2250.0 2250.0 2520.0 2822.4 3161.1 3540.4 SP 2202 2 109 36 Project (Salary) 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 789 31 750.0 750.0 840.0 940.8 1053.7 1180.1 SP 2202 2 789 36 0.0 0.0 0.0 0.0 0.0 0.0 SP 4202 1 202 0 Infrastructural development in government/Adarsh 0.0 0.0 0.0 0.0 0.0 0.0 SP 4202 1 202 50 schools. (Education Cess) 0.0 0.0 0.0 0.0 0.0 0.0 SP 4202 1 789 53 0.0 0.0 0.0 0.0 0.0 0.0 SP 4202 1 202 53 0.0 0.0 0.0 0.0 0.0 0.0 SP Opening of Adarsh Schools in each block of the State 2202 2 109 50 0.0 0.0 0.0 0.0 0.0 0.0 (ACA 2007-08) SP 2202 2 109 50 Popularization of science education (Science Fairs, 0.0 1.3 0.0 1.7 2.3 3.0 SP 2202 1 789 36 Science Seminars and Science Exhibitions) (Revived) 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 789 42 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 1 789 50 0.0 0.6 0.0 0.8 1.1 1.4 SP 4202 1 202 53 Strengthening of Senior Secondary Girls Schools 0.0 136.0 0.0 179.3 236.3 311.5 SP 4202 1 789 53 0.0 64.0 0.0 84.4 111.2 146.6 SP Subsidy to students from Government Schools 2202 2 109 42 Visiting the Science City (Transferred to Sub-head 0.0 0.0 0.0 0.0 0.0 0.0 S&T) (Dropped) SP 2202 2 109 36 To promote sports in Punjab schools 0.0 6.8 0.0 7.2 7.5 7.9 SP 2202 2 109 50 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 789 36 0.0 3.2 0.0 4.2 5.6 7.3 SP 2202 2 789 50 0.0 0.0 0.0 0.0 0.0 0.0

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Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * MH SMH Mh SOE (RE) (BE) (P) (P) (P) (P) SP 2202 2 109 36 Vocational Education Program 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 109 42 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 789 42 0.0 0.0 0.0 0.0 0.0 0.0 SP 2202 2 789 50 0.0 0.0 0.0 0.0 0.0 0.0 Financial assistance to the State under 13th Finance CS 2202 1 101 31 0.0 0.0 0.0 0.0 0.0 0.0 Commission for implementation of Sarv Shiksha CS 2202 1 789 31 Abhiyan Program 0.0 0.0 0.0 0.0 0.0 0.0 Teacher Education Establishment of District CS 2202 2 105 16 0.0 0.0 0.0 0.0 0.0 0.0 Institutes of Education and Training (DIETs) CS 2202 5 1 0 Assistance for appointment of Urdu teachers (100 %) 0.0 0.0 0.0 0.0 0.0 0.0 CS 2202 6 1 50 0.0 0.0 0.0 0.0 0.0 0.0 CS 2202 7 1 31 0.0 22.5 0.0 25.2 28.2 31.6 CS 2202 8 789 31 0.0 7.5 0.0 8.4 9.4 10.5 CS 2202 2 105 36 Incentives to girls for secondary education (100 %) 0.0 86.3 0.0 113.7 149.9 197.5 CS 2202 2 105 31 0.0 0.0 0.0 0.0 0.0 0.0 CS 2202 5 789 31 0.0 0.0 0.0 0.0 0.0 0.0 CS 2202 5 789 36 0.0 28.8 0.0 37.9 50.0 65.9 CS 2202 2 109 50 Inclusive Education for Disabled at Secondary Stage 0.0 0.0 0.0 0.0 0.0 0.0 CS 2202 2 109 36 (IEDSS) (100%) 0.0 40.0 0.0 52.7 69.5 91.6 CS 2202 2 109 34 National means cum Merit Scholarship Scheme 0.0 0.0 0.0 0.0 0.0 0.0 CS 2202 2 109 36 (100%) (Non-Plan) 0.0 38.0 0.0 50.1 66.1 87.1 CS 2202 2 789 34 0.0 0.0 0.0 0.0 0.0 0.0 CS 2202 2 789 36 0.0 12.7 0.0 16.7 22.0 29.0 CS 2202 0 102 20 Taking over of National Fitness Corps (NFC) 0.0 1.0 0.0 1.1 1.1 1.2 CS 2202 0 102 1 0.0 0.0 0.0 0.0 0.0 0.0 The Scheme for providing quality Education in CS 2202 2 109 36 0.0 100.0 0.0 131.8 173.8 229.0 Madrassas (SPQEM) (100%) CSS 2202 1 101 31 Mid-Day Meal Scheme (MDM) 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 1 101 36 1116.1 1053.3 1471.1 1939.1 2556.1 3369.3

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Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * MH SMH Mh SOE (RE) (BE) (P) (P) (P) (P) CSS 2202 1 101 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 1 789 31 1694.0 1718.6 1897.2 2124.9 2379.9 2665.5 CSS 2202 1 101 31 Sarv Sikhsha Abhiyan including Education Guarantee 2042.3 2622.0 2287.4 2561.9 2869.3 3213.6 Scheme (EGS), National Program for Education of CSS 4202 1 201 53 602.5 760.0 794.2 1046.9 1379.9 1818.9 Girls at Elementary Level (NPEGEL) & Kasturba CSS 2202 1 789 31 Gandhi Balika Vidyalaya (KGBV) (65:35) 3317.4 4278.0 3715.4 4161.3 4660.6 5219.9 CSS 4202 1 789 53 997.9 1240.0 1315.3 1733.8 2285.4 3012.5 CSS 2202 2 105 50 Construction and running of girls hostels for students 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 36 of Secondary & Senior Secondary Schools (90:10) 0.0 0.0 0.0 0.0 0.0 0.0 CSS 4202 1 201 36 0.0 0.0 0.0 0.0 0.0 0.0 CSS 4202 1 201 42 0.0 0.0 0.0 0.0 0.0 0.0 CSS 4202 1 202 31 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 789 36 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 31 7.5 10.0 8.4 9.4 10.5 11.8 CSS 2202 2 789 31 7.5 10.0 8.4 9.4 10.5 11.8 CSS 2202 2 789 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 31 Information and Communication Technology (ICT) in 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 789 31 Punjab Schools (75:25) 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 1 800 31 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 1 800 36 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 36 0.2 50.0 0.3 0.4 0.5 0.6 CSS 2202 2 789 36 0.0 50.0 0.0 65.9 86.9 114.5 CSS 4202 3 102 31 Rashtriya Madhyamik Shiksha Abhiyan (RMSA) for 0.0 0.0 0.0 0.0 0.0 0.0 CSS 4202 2 104 50 Universlization of Secondary Education (75:25) 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 31 270.0 225.0 302.4 338.7 379.3 424.9 CSS 2202 2 109 36 200.0 225.0 263.6 347.5 458.1 603.8 CSS 4202 3 789 31 141.2 225.0 158.1 177.1 198.4 222.2 CSS 4202 3 789 36 138.8 225.0 183.0 241.2 317.9 419.0

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Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * MH SMH Mh SOE (RE) (BE) (P) (P) (P) (P) CSS 2202 2 789 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 1 36 Sakshar Bharat Mission- 2012 (75:25) (Earlier name: 0.1 68.7 0.1 0.2 0.2 0.3 Adult Education Program 67:33) CSS 2202 2 1 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 789 36 0.0 68.7 0.0 90.5 119.3 157.2 CSS 2202 2 789 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 789 53 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 1 101 31 Setting up of model schools at block level in 83.0 136.0 92.9 104.1 116.6 130.6 CSS 2202 1 789 36 educationally backward blocks (scheme delinked by 60.6 64.0 79.8 105.2 138.7 182.9 GoI wef 2015-16 ) CSS 2202 1 789 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 1 Teacher Education establishment of district Institutes 213.5 180.0 239.1 267.8 299.9 335.9 of Education and Training (DIETS) (75:25 pattern CSS 2202 2 109 11 0.0 0.1 0.0 0.1 0.1 0.1 from 1/4/12)(Earlier pattern:100%)(salary) CSS 2202 2 109 13 0.0 2.5 0.0 2.6 2.8 2.9 CSS 2202 2 109 16 0.0 0.7 0.0 0.0 0.0 0.0 CSS 2202 2 109 20 0.0 14.5 0.0 0.0 0.0 0.0 CSS 2202 2 109 26 0.0 0.1 0.0 0.1 0.1 0.1 CSS 2202 2 109 28 0.0 0.1 0.0 0.0 0.0 0.1 CSS 2202 2 109 31 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 52 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 92 0.0 0.3 0.0 0.4 0.4 0.4 CSS 2202 2 109 93 0.0 1.8 0.0 1.9 2.0 2.1 CSS 4202 1 202 52 0.0 50.0 0.0 52.6 55.4 58.3 CSS 4202 1 202 53 0.0 50.0 0.0 65.9 86.9 114.5 CSS 2202 2 789 1 0.0 60.0 0.0 67.2 75.3 84.3 CSS 2202 2 789 11 0.0 0.3 0.0 0.3 0.3 0.3 CSS 2202 2 789 13 0.0 4.3 0.0 4.5 4.7 5.0

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Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Category * MH SMH Mh SOE (RE) (BE) (P) (P) (P) (P) CSS 2202 2 789 16 0.0 1.4 0.0 1.5 1.6 1.6 CSS 2202 2 789 20 0.0 28.9 0.0 30.4 32.0 33.7 CSS 2202 2 789 26 0.0 0.3 0.0 0.3 0.3 0.3 CSS 2202 2 789 28 0.0 0.3 0.0 0.3 0.3 0.3 CSS 2202 2 789 50 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 789 52 0.0 0.0 0.0 0.0 0.0 0.0 CSS 4202 1 789 53 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 789 92 0.0 0.8 0.0 0.8 0.9 0.9 CSS 2202 2 789 93 0.0 3.9 0.0 4.1 4.3 4.5 CSS 2202 2 789 98 0.0 0.0 0.0 0.0 0.0 0.0 CSS 2202 2 109 31 Vocationalization of Education (75:25) 68.5 99.1 76.8 86.0 96.3 107.8 CSS 2202 2 789 36 68.5 99.1 90.3 119.1 157.0 206.9 * CS = Center Sector schemes, SP = State Plan schemes, CSS = Centrally Sponsored Schemes

4.3.2.1 Gender-sensitive allocations for plan schemes under trend scenario

In the context of plan schemes presented above, it may be noted that gender sensitivity in allocation of budgetary resources started in India with the Seventh Five-Year Plan (1987-1992). Formal earmarking of funds for women, however, began with the introduction of Women's Component Plan (WCP) in 1997-98 and has continued since then. Following table presents the list of plan schemes of the DSE which have a WCP. The share of allocation for WCP in the approved plan outlay for such schemes in FY 2015-16 has been computed and used to estimate the gender-based allocations in the scheme-wise projections made in above table under Trend Scenario of MTEF.

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Table 38: Women’s Component Plan in the Trend scenario projections for plan schemes under MTEF (in INR million)

Annual Plan 2016-17 MTEF Projections Scheme Approved Outlay 2015-16 (P) 2016-17 (P) 2017-18 (P) 2018-19 (P) Major Head/Sub-head/Schemes Code Total % of Total Total Total Total WC WC WC WC WC Outlay WC Outlay Outlay Outlay Outlay Sarv Sikhsha Abhiyan including Education Guarantee Scheme (EGS), National Program for Education of Girls EDE-01 8,900.0 4,183.0 47% 8,112.3 3,812.8 9,503.7 4,466.7 11,195.1 5,261.7 13,264.8 6,234.5 at Elementary Level (NPEGEL) & Kasturba Gandhi Balika Vidyalaya (KGBV) (60:40) EDE-03 Mid-Day Meal Scheme (MDM) (60:40) 2,771.9 1,219.6 44% 3,368.3 1,482.1 4,064.0 1,788.2 4,935.9 2,171.8 6,034.7 2,655.3 Implementation of EDUSAT Project in EDE-04 20.0 8.0 40% 103.8 41.5 135.0 54.0 175.8 70.3 229.5 91.8 the State State support for Inclusive Education for EDE-07 4.6 2.3 50% 6.7 3.4 12.9 6.5 17.0 8.5 22.4 11.2 Disabled at Secondary Stage (IEDSS) Incentives to girls for secondary CS-10 115.0 115.0 100% 0.13 0.13 0.17 0.17 0.23 0.23 0.30 0.30 education (100% CS) CS-13 National means cum Merit Scholarship 50.7 25.4 50% 0.13 0.07 0.17 0.09 0.23 0.11 0.30 0.15 Scheme (100%) (Non-Plan) CS-15 The Scheme for providing quality Education in Madrassas (SPQEM) 100.0 40.0 40% - - 131.8 52.7 173.7 69.5 229.0 91.6 (100% CS) EDS-01 Information and Communication Technology (ICT) in Punjab Schools 100.0 50.0 50% 0.3 0.1 66.2 33.1 87.3 43.7 115.1 57.6 (60:40) EDS-02 Rashtriya Madhyamik Shiksha Abhiyan (RMSA) for Universalization of 900.0 337.5 38% 907.1 340.2 1,104.4 414.2 1,353.6 507.6 1,669.8 626.2 Secondary Education (60:40) EDS-03 Sakshar Bharat Mission- 2012 (60:40) 137.3 68.7 50% 0.1 0.1 90.6 45.3 119.5 59.8 157.5 78.8 (Earlier name: Adult Education Program EDS-05 Setting up of model schools at block level in educationally backward blocks 200.0 100.0 50% 172.7 86.4 209.3 104.7 255.3 127.7 313.4 156.7 (scheme delinked by GoI wef 2015-16 ) EDS-06 Construction and running of girls hostels for students of Secondary & Higher 20.0 20.0 100% 16.8 16.8 18.8 18.8 21.0 21.0 23.6 23.6 Secondary Schools (60:40) Page 77 of 153

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Annual Plan 2016-17 MTEF Projections Scheme Approved Outlay 2015-16 (P) 2016-17 (P) 2017-18 (P) 2018-19 (P) Major Head/Sub-head/Schemes Code Total % of Total Total Total Total WC WC WC WC WC Outlay WC Outlay Outlay Outlay Outlay EDS-07 Information and Communication 3,000.0 1,560.0 52% 3,360.0 1,747.2 3,763.2 1,956.9 4,214.7 2,191.6 4,720.5 2,454.7 Technology (ICT) Project (Salary) EDS-20 Popularization of science education (Science Fairs, Science Seminars and 1.9 0.9 44% - - 2.6 1.1 3.4 1.5 4.4 2.0 Science Exhibitions) (Revived) EDS-21 To promote sports in Punjab schools 10.0 4.4 44% - - 11.3 5.0 13.0 5.7 15.2 6.7 Dr. Hargobind Khurana Scholarship for EDS-22 100.0 50.0 50% 79.0 39.5 146.4 73.2 193.0 96.5 254.4 127.2 brilliant students EDS-26 Vocationalization of Education (60:40) 198.1 99.1 50% 167.0 83.5 205.0 102.5 253.2 126.6 314.7 157.4 Strengthening of Senior Secondary Girls EDS-27 200.0 200.0 0% - - 263.6 - 347.5 - 458.0 - Schools EDS-29 Strengthening of 162 Senior Secondary Girls Schools and opening of 2 new ------Meritorious schools (RIDF-XXI)(85:15) EDS-30 Punjab Swasth Kanya Yojna ------TOTAL 16,829.6 8,083.8 16,294.4 7,653.6 19,729.1 9,386.6 23,359.4 11,111.2 27,827.6 13,233.4

Non-plan Expenditure Projections under Trend Scenario

Projections for non-plan schemes of DSE are presented below.

Table 39: MTEF Projections- Trend Scenario (Non-Plan) (in INR million)20

MH SMH Mh SOE 2014-15 RE 2015-16 (P) 2016-17 (P) 2017-18 (P) 2018-19 (P) 2202 0 101 1 13,272.0 14,864.7 16,648.4 18,646.2 18,646.2 2202 0 101 2 35.5 39.7 44.5 49.9 49.9 2202 0 101 93 2.7 2.9 3.0 3.2 3.2 2202 0 101 94 0.0 0.0 0.1 0.1 0.1 2202 0 101 11 0.0 0.0 0.0 0.0 0.0 2202 0 101 13 3.0 3.2 3.3 3.5 3.5

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MH SMH Mh SOE 2014-15 RE 2015-16 (P) 2016-17 (P) 2017-18 (P) 2018-19 (P) 2202 0 101 14 0.2 0.2 0.2 0.2 0.2 2202 0 101 21 - - - - - 2202 0 101 24 - - - - - 2202 0 101 50 - - - - - 2202 0 101 91 36.7 40.4 44.4 48.9 48.9 2202 0 101 92 - - - - - 2202 0 102 31 136.4 152.7 171.0 191.6 191.6 2202 0 104 1 194.1 217.4 243.5 272.7 272.7 2202 0 104 2 1.0 1.1 1.2 1.4 1.4 2202 0 104 93 0.2 0.2 0.2 0.2 0.2 2202 0 104 94 0.0 0.0 0.0 0.0 0.0 2202 0 104 11 0.1 0.1 0.1 0.1 0.1 2202 0 104 13 0.1 0.1 0.1 0.1 0.1 2202 0 104 14 - - 0.1 0.1 0.1 2202 0 104 21 - - - - - 2202 0 104 24 - - - - - 2202 0 104 50 - - - - - 2202 0 104 91 1.8 2.0 2.2 2.5 2.5 2202 2 109 1 38,489.3 43,108.0 48,281.0 54,074.7 54,074.7 2202 2 109 2 37.0 41.5 46.4 52.0 52.0 2202 2 109 11 0.7 0.7 0.8 0.8 0.8 2202 2 109 13 4.0 4.2 4.4 4.7 4.7 2202 2 109 14 0.3 0.3 0.3 0.4 0.4 2202 2 109 16 0.0 0.0 0.0 0.0 0.0 2202 2 109 21 0.0 0.0 0.0 0.0 0.0 2202 2 109 24 - - - - - 2202 2 109 50 0.8 0.9 1.0 1.1 1.1 2202 2 109 50 0.5 0.6 0.6 0.7 0.7 2202 2 109 52 0.0 0.0 0.0 0.0 0.0 2202 2 109 91 180.0 198.1 218.1 240.0 240.0 2202 2 109 92 0.5 0.5 0.6 0.6 0.6 2202 2 109 93 6.0 6.3 6.7 7.0 7.0 2202 2 109 94 0.1 0.1 0.1 0.1 0.1 2202 2 1 1 500.0 560.0 627.2 702.5 702.5 2202 2 1 2 0.1 0.1 0.1 0.1 0.1 2202 2 1 11 1.9 2.0 2.1 2.2 2.2 Page 79 of 153

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MH SMH Mh SOE 2014-15 RE 2015-16 (P) 2016-17 (P) 2017-18 (P) 2018-19 (P) 2202 2 1 13 0.6 0.7 0.7 0.7 0.7 2202 2 1 14 0.2 0.2 0.2 0.2 0.2 2202 2 1 24 0.2 0.2 0.2 0.2 0.2 2202 2 1 50 - - - - - 2202 2 1 91 7.5 8.3 9.1 10.0 10.0 2202 2 1 92 0.5 0.5 0.6 0.6 0.6 2202 2 1 93 1.3 1.4 1.4 1.5 1.5 2202 2 1 94 0.1 0.1 0.1 0.1 0.1 2202 80 1 1 275.0 308.0 345.0 386.4 386.4 2202 80 1 2 0.1 0.1 0.2 0.2 0.2 2202 80 1 11 0.1 0.1 0.1 0.1 0.1 2202 80 1 13 1.9 2.0 2.1 2.2 2.2 2202 80 1 14 1.6 1.7 1.8 1.9 1.9 2202 80 1 16 2.1 2.2 2.3 2.5 2.5 2202 80 1 24 0.6 0.7 0.7 0.7 0.7 2202 80 1 50 0.0 0.0 0.0 0.0 0.0 2202 80 1 91 2.2 2.5 2.7 3.0 3.0 2202 80 1 92 0.4 0.4 0.4 0.5 0.5 2202 80 1 93 0.6 0.6 0.7 0.7 0.7 2202 80 1 94 0.2 0.2 0.2 0.2 0.2 2202 2 107 28 2.1 2.3 2.5 2.8 2.8 2202 2 107 34 4.0 4.9 5.9 7.2 7.2 2202 2 107 34 0.1 0.1 0.1 0.1 0.1 2202 2 107 34 0.2 0.2 0.2 0.3 0.3 2202 2 107 34 0.1 0.1 0.1 0.1 0.1 2202 2 110 31 2,440.0 2,685.6 2,956.0 3,253.5 3,253.5

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4.3.2.2 Summary of Bottom-Up - Trend Scenario MTEF projections Table 40 below presents summary of the Trend scenarios’ projections. Following are the key observations:

 Increase in total departmental expenditure: Total expenditure under the department is projected to increase by 12.41%% in 2015-16 over 2014-15 (RE). It is further projected to increase annually by 13.98%, 13.38% and 13.63% in 2016-17, 2017-18 and 2018-19 respectively.

 Increase in share of plan expenditure: Share of total plan (State Plan+ CSS+CS) expenditure under the department is projected to increase from 21.57% in 2014-15 (RE) to 21.92% in 2015-16. It is further projected to increase from 21.92% in 2015-16(P) to 25.48% in 2018-19(P).

 Increasing growth of plan expenditure: Annual growth rate for plan expenditure is projected to increase by almost 7% points from 14.24% in 2014-15 (RE) to 21.39% in 2016-17. It further projected to decrease to 18.23% in 2017-18(P). On the other hand, annual growth rate for non-plan expenditure remains same over the period from 2014-15 (RE) to 2018-19 (P). This implies that the department will gradually increase its focus on plan expenditure targeting developmental strategies.

Table 40: Share of plan and non-plan expenditure- trend scenario projections

Nature of 2014-15 2015-16 2016-17 2017-18 2018-19 Description expenditure RE (P) (P) (P) (P) % share in Plan Expenditure 21.57% 21.92% 23.34% 24.34% 25.48% total expenditure Non-Plan Expenditure 78.43% 78.08% 76.66% 75.66% 74.52% Plan Expenditure 14.24% 21.39% 18.23% 18.96% Annual Non-Plan Expenditure 11.90% 11.91% 11.91% 11.91% Growth Total 12.41% 13.98% 13.38% 13.63%

Table 41 below shows the trend in share of elementary and secondary education in departmental expenditure under trend scenario in the next three years.

 Increase in plan expenditure on secondary education: Share of secondary education in total plan expenditure is projected to gradually increase by more than 2% points from 27.70% in 2014-15 (RE) to 29.64% in 2016-17. Simultaneously, share of elementary education is projected to decrease from 72.30% in 2014-15 (RE) to 70.36% in 2016-17. It should be noted that secondary education share in plan expenditure more than doubled in 2014-15 (RE) as compared to 2013-14 due to more than double increase in expenditure under RMSA. Although share of secondary education in total departmental expenditure is projected to gradually decrease from 65.12%% in 2014-15 (RE) to 64.70% in 2016-17. It should be noted that secondary education share in total departmental expenditure is higher due to higher share in non-plan expenditure.

Table 41: Share of elementary and secondary education in departmental expenditure- trend scenario projections

2014-15 (RE) 2015-16 2016-17 2017-18 2018-19

(P) (P) (P) (P) Share in Plan Expenditure Elementary Education 72.30% 70.80% 70.36% 70.76% 71.81% Secondary Education 27.70% 29.20% 29.64% 29.24% 28.82% Share in Non- Plan Expenditure Elementary Education 24.59% 24.61% 24.63% 24.65% 24.67% Secondary Education 75.41% 75.39% 75.37% 75.35% 75.33% Share in total departmental expenditure Elementary Education 34.88% 34.73% 35.30% 35.87% 36.52%

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2014-15 (RE) 2015-16 2016-17 2017-18 2018-19

(P) (P) (P) (P) Secondary Education 65.12% 65.27% 64.70% 64.13% 63.48%

Table 42 shows the trend scenario in annual growth of different heads of departmental expenditure in the next three years.

Table 42: Expenditure projections by category of schemes

2015-16 2016-17 2017-18 2018-19 Nature of expenditure (P) (P) (P) (P) Central Sector -42.23% 29.97% 30.23% 30.45% Centrally Sponsored Scheme 12.73% 20.64% 14.18% 14.52% State 17.72% 21.40% 19.19% 19.96% Elementary 11.93% 15.85% 15.21% 15.68% Secondary 12.66% 12.99% 12.39% 12.48%

 Higher Growth in Centrally Sponsored Scheme Expenditure: Annual growth of under the head of CSS expenditure increased from 12.73% in 2015-16(P) to 20.64% in 2016-17(P) due to introduction of the scheme ‘Teacher Education establishment of DIETS. Previously, the scheme was under the head central sector scheme (100%) which was moved to CSS with 75/25 share in 2015-16(BE).

 Higher Growth in State Plan Expenditure: Annual growth rate in state plan expenditure has also followed the same and is projected to increase by five points from 17.72% in 2015-16(P) to 21.40% in 2016- 17(P). The state plan had revived its old scheme ‘Popularization of science education (Science Fairs, Science Seminars and Science Exhibitions)’ in 2015-16(BE). It also introduced Strengthening of Senior Secondary Girls Schools scheme in 2015-16(BE).

 It may be noted that there is negative growth rate in initial year of central sector due to no financial assistance to the State under 13th Finance Commission for implementation of Sarv Shiksha Abhiyan Program. 4.4 Bottom-Up Budgeting- Costed Reform Interventions

As discussed in Section 2.2.2, after estimating the baseline budget, the second part of bottom-up budgeting involves:

 Identification of issues and reform interventions (section 4.4.1): This is done through four sources, namely (a) One-time preparation of a logical framework (log-frame) for all schemes level with annual update; (b) Measuring physical progress on Performance Indicators (PIs) – both temporal & comparative assessment (c) Scheme Review, and (d) Institutional Review.

 Estimating the associated cost implications of identified interventions.

4.4.1 Identification of reform interventions 4.4.1.1 Preparation of logical framework at scheme level To begin with, ‘Scheme Outputs’ are specified/ defined for all schemes that are presently running under the DSE and are expected to continue during FY2016-18. These outputs are then mapped to the concerned ‘Objective of the department’ which they contribute achieving. Results of achievement of departmental objectives have been termed as ‘departmental outcome’. Outcomes of all departments then contribute to attainment of long-term government goal of social and economic upliftment of its people. After mapping the outputs to outcomes, performance indicators have been devised to measure respective performance which will help in informing the government priorities and budgetary allocations for future.

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The objective of the department is to universalise elementary and secondary education while simultaneously enhancing the quality of learning. Detailed strategies of the department in achieving its objectives have already been mentioned in Section 4.1.

4.4.1.2 Observations from log-frame and recommendation therein Table 43 on next page presents the log frame for the DSE, GoP for all schemes presently running under the department. Definitions of key performance indicators used have been given in Annexure. Key observations from the logframe exercise are as follows:

 No scope identified for convergence of schemes being operated by the Department of School Education  There are schemes being run by other departments (e.g. 1. Department of Welfare of Scheduled Castes and Backward Classes; Department of Social Security and Women & Child Development) which also contribute to meeting objectives of school education sector. There is a need for specifying collective targets and individual targets, esp. at outcome-level indicators  There are many schemes have been allocated a minimum amount of INR 100,000 to keep them functional. There is a need to revisit the need for continuity of these schemes and also explore options of merging them with umbrella/ flagship schemes. In this context, it may be noted that schemes contributing to top 90% of the total departmental plan expenditure in 2015-16 (BE) are merely five in number, namely Provision for SSA, RMSA, Mid-Day Meal for Children, Information and Communication Technology (ICT) Project (Salary) and Teacher Education establishment of District Institutes of Education and Training (DIETS). Four out of these five schemes are Centrally Sponsored Schemes (CSS).

A noteworthy point in this context is the fact that the central government has decided to delink some of the CSS such as Scheme for setting up of 6000 Model Schools, and Provision for Salary of Inclusive Education Volunteers (IEV) under SSA Program (Salary) from its support. Consequently, the state government is facing issue in continuing the schemes as it is obliged to carry additional financial burden (of the counterpart which hitherto used to flow from Center). Additionally, the Central Government has not released INR 100 million fund for providing quality Education in Madrassas (a central sector scheme) in 2014-15.

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Table 43: Logframe and performance indicators for schemes presently running under the department (in INR million)

Sl. MH, SMH, mh, ST21 Scheme Name 2015-16 Total Scheme Scheme Outputs Performance Departmental Performance No. BE BE 2015-16 Indicator for Scheme Objective Indicator for Output Dept. Objective (Outcome) Universalizing primary/secondary education by incentivizing access 1 2202 01 101 CSS Mid-Day Meal Scheme 547.9 2771.90 Provision of cooked meal to % of students of classes Universalization Net enrolment (MDM) children in government, I-VIII, studying in of Elementary ratio at ES level/ 2202 01 101 State 505.4 aided and local body schools schools covered under Education Annual dropout and those covered under MDM scheme, who rate at ES level 2202 01 798 CSS 894.0 EGA and AIE schemes , receive mid-day meal studying in classes I-VIII 2202 01 798 State 824.6 2 2202 01 101 State Sarv Sikhsha Abhiyan 1311.0 8900.00 Provision for various Student classroom ratio Universalization Net enrolment including Education components to ES like: 1) in ES schools/ Ratio of of Elementary ratio at PS / 2202 01 101 CSS Guarantee Scheme 1311.0 construction of new schools; PS to UPS/ % of ES Education annual drop-out (EGS), National 2) upgrade of PS to UPS; 3) schools without library/ rate at ES Level / 4202 01 201 CSS Program for 380.0 strengthening of existing % of works completed in transition rate Education of Girls at schools by constructing hostel construction/ % of from PS to UPS 4202 01 201 State 380.0 Elementary Level additional classrooms; 4) students that receive free to SS level / % 2202 01 798 CSS (NPEGEL) & Kasturba 2139.0 distribution of free text text books or uniforms/ share of SC Gandhi Balika books and uniforms; 5) % of out of school population at ES 2202 01 798 State Vidyalaya (KGBV) 2139.0 training out of school children trained/ pupil level (65:35) children; 6) construction of teacher ratio at PS and 4202 01 798 CSS 620.0 libraries in schools; 7) UPS level/ % of recruitment and training of untrained teachers at ES 4202 01 798 State 620.0 teachers. level 3 2202 02 109 State Rashtriya Madhyamik 150.0 900.00 Provision for various % of SS without library Universalization Net enrolment Shiksha Abhiyan components to secondary or laboratory or of Secondary ratio at SS level/ 2202 02 109 CSS (RMSA) 300.0 schools: 1) Construction of computer room/ % of SS Education / to Transition rate new schools; 2) upgrade of without girls hostel/ % of remove gender, from ES to SS 2202 02 798 State 150.0 existing schools to higher SS without separate socio- economic level/ annual levels; 3) strengthening of toilet for girls and boys/ & disability drop-out rate at 2202 02 798 CSS 300.0 existing schools through % of SS without barriers by SS level/ % of construction of additional playground/ pupil providing trained teachers classrooms; 4) construction teacher ratio in SS/ % of universal access at SS level/ Ratio of laboratories, libraries and untrained teachers at SS to secondary level of SS per 1000 of computer rooms; 5) level /Student classroom eligible construction of girls activity ratio at SS level population / room; 6) construction of Gender Parity hostel for girls with medical Index / % of

21 Please note: MH- Major Head/ SMH- Sub-Major Head/ mh- Minor Head / ST- Scheme Type - CSS- Centrally Sponsored / CS- Central Sector

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Sl. MH, SMH, mh, ST21 Scheme Name 2015-16 Total Scheme Scheme Outputs Performance Departmental Performance No. BE BE 2015-16 Indicator for Scheme Objective Indicator for Output Dept. Objective (Outcome) facilities; 7) Providing disable students vocational education; 8) enrolment recruitment and training of teachers 4 2202 02 109 CSS Vocationalization of 66.8 198.10 To provide vocational % of eligible students To enhance Dropout rate at Education (75:25) education in 400 hundred received vocational individual the secondary 2202 02 109 State 32.3 selected schools training employability, level reduce the 2202 02 798 CSS 66.8 mismatch between demand 2202 02 798 State 32.3 and supply of skilled manpower and provides an alternative for those pursuing higher education Improving access to schooling through incentivizing students

5 2202 02 789 State Dr. Hargobind 32.0 100.00 To provide scholarships to Transition rate from SS To encourage Dropout rate at Khurana Scholarship brilliant students to SSS young children SS level / Pass 2202 02 107 State for brilliant students 68.0 further for percentage at SS academic and SSS level excellence / retention of brilliant poor students at Senior Secondary level 6 2202 02 109 CS National means cum 38.0 50.70 Award scholarship to % of student received Universalization Dropout rate, Merit Scholarship meritorious students scholarship under of Elementary Transition rate 2202 02 798 CS Scheme (Non-Plan) 12.7 belonging to economically allocated seats and Secondary from a) upper weaker sections and to Education primary to encourage them to continue secondary (b) their studies from class VI secondary to till class XII senior secondary 7 2202 01 109 State State support for 3.1 4.63 Providing scholarship to all % of CWSN enrolment to Enrolment of all Dropout rate at Inclusive Education for students with disabilities at total enrolment disabled students ES, SS and SSS 2202 01 789 State Disabled at Secondary 1.5 elementary schooling and at ES, SS and SSS level Stage (IEDSS) secondary schooling (class level IX-XII)

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Sl. MH, SMH, mh, ST21 Scheme Name 2015-16 Total Scheme Scheme Outputs Performance Departmental Performance No. BE BE 2015-16 Indicator for Scheme Objective Indicator for Output Dept. Objective (Outcome) Improving Quality of Education by improving school infrastructure

8 2202 01 101 State Implementation of 8.6 20.00 Set up satellite system for % of UPS, SS and SSS To provide better Net enrolment EDUSAT Project in the providing education to the covered under the quality education ratio at UPS, SS 4202 01 201 State State - (Previously 5.0 Govt. educational Edusat Project at UPS, SS and and SSS level/ NABARD) institutions/ establish SSS level Transition rate 2202 01 789 State 6.4 Edusat Computer Libraries from UPS to SS (E-Libs) for SS and SSS / and SS to SSS Teacher training level/annual dropout rate at UPS, SS and SSS level/ pass percentage at UPS, SS and SSS level 9 2202 02 109 State Improvement of 0.1 0.10 Assistance for maintenance/ % of SS that have well- Improving Pass percentage laboratory improvement of science functioning science education at secondary and 2202 02 789 State infrastructure by 0.0 laboratories in SS laboratories infrastructure to SS level providing science enhance quality material in 351 schools of education upgraded under NABARD-RIDF-XVI (85:15) 10 2202 02 109 State Information & 12.5 100.00 Providing ICT infrastructure % of SS and SSS with To impart Transition rate Communication to students of Class VIII to computer teacher / % of computer ES to SS / 2202 02 109 CSS Technology (ICT) in 37.5 XII SS and SSS with education to all Dropout at ES Punjab schools (75:25) computer lab students of class and SS level / 2202 02 798 State 12.5 VIII to XII Pass percentage at SS level 2202 02 798 CSS 37.5 Improving quality of education through institutional improvement

11 2202 02 109 State Information and 2250.0 3000.00 Distribution of Salaries to % of school computer To impart Transition rate Communication 6,890 computer teachers teacher / % of schools computer ES to SS / 2202 02 789 State Technology (ICT) 750.0 and 72 non-teaching having functional education to all Dropout at ES, SS Project (Salary) employees computer students of class VI to XII in Govt. and Govt. aided schools 12 2202 02 109 State Popularization of 1.3 1.94 Yearly science To create awareness Increase Dropout

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Sl. MH, SMH, mh, ST21 Scheme Name 2015-16 Total Scheme Scheme Outputs Performance Departmental Performance No. BE BE 2015-16 Indicator for Scheme Objective Indicator for Output Dept. Objective (Outcome) 2202 01 789 State science education 0.0 fair/exhibition at the block about science and participation of rate/Transition (Science Fairs, Science level technology and the children at rate 2202 01 789 State Seminars and Science 0.6 encourage participation higher level Exhibitions) of students (Revived) 13 2202 01 101 State Provision for deficit 0.1 0.10 Appointment of Block Transferring senior To manage and People teacher budget to meet the Resource Persons (BRPs) at teacher to block as control primary ratio 2202 01 789 State enhanced honorarium 0.0 the block level by administration school of education volunteers transferring existing (Sikhya Karmies) senior/experienced under SSA Program teachers. The resultant (Salary) vacancies filled by appointing two education volunteers in lieu of one BRP 14 2202 01 101 State Provision for deficit 225.0 300.00 Identify school dropouts and Reduction in out of 100% enrolment Net enrolment budget to meet the enroll them in the nearest school children at primary level ration at PS level 2202 01 789 State enhanced honorarium 75.0 school to help them get / Dropout rate at of special trainers elementary education under PS level under SSA Program Education Guarantee (Salary) Scheme (EGS) and Alternative Innovative Education (AIE). 15 2202 01 101 State Provision for Salary of 0.1 0.10 Provide educational and % of special needs 100% enrolment NER at PS Level Inclusive Education support services to the students enrolled at the at primary level Volunteers (IEV) children with special needs primary level Under SSA Program (Salary) 16 2202 02 109 State Teacher Education 50.0 400.00 To impart elementary % of teacher received in- 100% trained Transition rate establishment of teacher training to Service training / % of teacher at from ES to SS / % 2202 02 109 CSS district Institutes of 150.0 elementary school teachers filled post in DIETS elementary level of trained teacher Education and at ES level 4202 01 202 State Training (DIETS) 25.0 (75:25 pattern from 4202 01 202 CSS 1/4/12) (Earlier 75.0 pattern:100%)(salary) 2202 02 798 State 25.0

2202 02 798 CSS 75.0

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Sl. MH, SMH, mh, ST21 Scheme Name 2015-16 Total Scheme Scheme Outputs Performance Departmental Performance No. BE BE 2015-16 Indicator for Scheme Objective Indicator for Output Dept. Objective (Outcome) Ensuring equity through the removal of regional, gender, socioeconomics and disability gaps 17 2202 02 109 CS Inclusive Education for 40.0 40.00 Providing all students with Dropout rate at ES, SS Enrolment of all % of CWSN Disabled at Secondary disabilities, completing eight and SSS level / % of disabled students enrolment to Stage (100%) years of elementary schools having ramp at ES, SS and SSS total enrolment schooling, an opportunity to level complete four years of secondary schooling (class IX-XII) in an inclusive and enabling environment 18 4202 01 202 State Strengthening of 136.0 200.00 Strengthening of 123 senior Girls enrolment ratio at To increase Female literacy Senior Secondary Girls secondary girls schools SS level female literacy rate/Gender 4202 01 789 State Schools 64.0 rate and reduce Parity Index Gender disparity 19 2202 02 109 State Construction and 10.0 20.00 Construction of girls Girls enrolment ratio at To increase Female literacy running of girls hostels hostels in 21 educationally SS level female literacy rate/Gender 2202 02 798 State for students of 10.0 backward blocks rate and reduce Parity Index Secondary & Senior Gender disparity Secondary Schools (Schedule Caste & Backward Classes) (90:10) 20 2202 02 001 CSS Sakshar Bharat 63.7 137.30 Impart functional literacy % of women covered Impart functional Female literacy Mission- 2012 (75:25) and numeracy to non- under the program in literacy among rate in Mansa, Sri 2202 02 001 State (Earlier name: Adult 5.0 literate and non-numerate focus areas (Six women Muktsar Sahib, Education Program adults primarily among Districts) Ferozepur, 21 2202 02 798 CSS 67:33) 63.7 women in six districts of Sangrur, Punjab where literacy rate is Bathinda and 2202 02 798 State 5.0 below 50% (Census 2011) Faridkot (SCs), Scheduled Tribes (STs) Minorities, other disadvantaged groups 22 2202 05 001 CS Assistance for 22.5 30.00 To promote Urdu language No. of Urdu teacher per Promotion of Net enrolment appointment of Urdu in the state 1,000 Muslim Urdu language ratio of Muslim 2202 05 798 CS teachers 7.5 population in the age communities / group of 5-18 dropout rate among Muslim community 23 2202 05 105 CS Incentives to girls for 86.3 115.00 A sum of 3000/- is credited Transition rate among To promote Gross enrolment

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Sl. MH, SMH, mh, ST21 Scheme Name 2015-16 Total Scheme Scheme Outputs Performance Departmental Performance No. BE BE 2015-16 Indicator for Scheme Objective Indicator for Output Dept. Objective (Outcome) 2202 05 798 CS secondary education 28.8 into the bank accounts (in girls in SC/St enrolment of girls ratio of SC/ST the form of Fixed communities belonging to girls at SSS / Deposit/Warrants) of all SC/ST dropout rate at eligible girls under the communities in UPS / pass scheme secondary percentage at SS schools level among SC/ST Girls 24 2202 02 109 CS The Scheme for 100.0 100.00 To encourage traditional Net enrolment ratio Madrasa Literacy rate of providing quality institutions like Madrasas among Muslim modernization Muslim Education in and Maktabs by giving community and enhance communities Madrassas (SPQEM) financial assistance to awareness about (100%) introduce science, modern mathematics, social studies, education among Hindi and English in their the Muslim curriculum so that academic community / proficiency for classes I-XII Universalization is attainable for children education studying in these institutions and to provide opportunities for vocational training for children above 14 years of age. Ensuring Quality Improvement in Schools (Non-Scholastic)

25 2202 02 109 State To promote sports in 6.8 10.00 To organize Zone level % of school with To encourage % of School Punjab schools tournament, state level playground / % of young children having sport 2202 02 789 State 3.2 tournament, National school schools having advance for sport facilities games, pre-national sport facilities activities coaching camps 26 2204 00 102 CS Taking over of 1.0 1.00 - - - - National Fitness Corps (NFC)

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4.4.1.3 Assess performance and gap Three types of analysis on physical indicators have been done: (a) Inter-State; (b) Intra-State; and (c) Assessment on own trend performance.

A. Inter-State Comparative Assessment i. Elementary Education A comparative assessment of select PIs (subject to data availability) under elementary education in Punjab vis- a-vis the national average and some other progressive states in 2014-15 are presented in Table 44. Following are the main observations noted:

 Higher Literacy than National Average yet Significant Population Illiterate: Although the literacy rate in the state (76.7%) is higher than the national average of 74%, it is lower as compared to Kerala which has the highest literacy rate in the country (94%). According to AWP&B SSA report 2015-16, male literacy rate in the state is 81.5% whereas female literacy rate is 71.3%. The female literacy for rural areas is 57.7% which needs improvement. Although overall literacy rate is satisfactory in Punjab, there is high intra-state or inter-district variability, Literacy rate in Mansa district is lowest (62.8%) followed by Muktasar (66.8%), Sangrur and Barnala (68.9%), Ferozpur (69.8%), Bathinda (69.6%) and Taran (69.4%) The overall female literacy rate in these districts are also far below than the state average. Mansa has lowest female literacy rate 56.4% which is also lower than the state average of rural female literacy rate.

 High Gross Enrolment Ratio (GER) though Net Enrolment Ratio (NER) is less than 100%: GER, as of 2013-14, at both primary (105.6) and upper primary level (95.3) was higher than the national average and also higher than most of the states. However, NER of 70.1% at the upper primary level implies that 29.9% of the population in the official age group did not complete upper primary education. NER in Kerala (82.3) and Madhya Pradesh (76.1) is relatively much higher than that of Punjab.

 Low Gender Parity: In terms of gender parity, Punjab has noticeably underperformed in comparison to all other states in the country. Ratio of number of females to number of males enrolled at primary and upper primary level, i.e. Gender Parity Index (GPI) is 0.82 and 0.79 respectively. Kerala (0.95) has highest GPI in primary school followed by Madhya Pradesh (0.91) while Madhya Pradesh (0.98) has highest GPI at upper primary school level.

 Need for more Upper Primary Schools: The state’s ratio of number of primary schools per thousand population and upper primary schools per thousand populations is equal to the national average. In addition, ratio of primary to upper primary schools in the state is 1.6 while the national average is 2.04. This implies that the number of primary schools is more than 1.6 times the number of upper primary schools which leads to the possibility of unavailability of upper primary schools for all students who pass out of primary schools. Hence, the state is required to construct more upper primary schools in order to cater to the students passing out of the primary level. The ratio of primary to upper primary schools/sections which clearly shows the impact of Sarva Shiksha Abhiyan under which a large number of schools have been opened in the recent past.

 High Student-Classroom Ratio: Student Classroom Ratio (SCR) in the state at primary level should be less than 30 and at upper primary level should be less than 35 under the Right to Education Act. 17.9 % of schools at primary level have SCR greater than 30 and 19.6 % schools at upper primary level have SCR greater than 35. Although percentage of SCR at primary level lower than the national average (27.5), it differs at disaggregated level mainly in border and remote areas. On the other hand, it is lower than Kerala (15.9) in primary school segment and Rajasthan (14.5) in upper primary segment. This suggests the need for constructing more classrooms in existing schools at elementary level so that class size is appropriate and hence it is easier for the teacher to pay attention to every student in the class.

 Low Transition Rate: Transition rate from primary to upper primary level in the state is 83.66% while at the national level it is 87.09% on an average. Goa has 99.45% transition rate. One of the reasons for low

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transitions rates, as already discussed above is the unavailability of sufficient number of upper primary schools.

 High Drop-out Rate: The average drop-out rate has decreased from 1.8 in 2011-12 to 1.3 in 2014-15 at primary level. The average drop-out rate at upper primary level (2.85) is lower than the national average but it is higher than other states like Maharashtra (0.61) and Uttar Pradesh (0.53). Similarly, average drop- out rate at primary level is lower than national average but it is higher than that of its neighbour state Haryana (0.4). Further analysis of drop-out rate grade-wise reveals that grade VI has lowest dropout rate (0.61) and grade VIII has the highest (7.76) in 2013-14. However, dropout rate prepared by the Annual Work Plan and Budget (AWP&B) 2015-16 prepared by the DSE for SSA shows that the dropout rate of girls at primary level is lower than boys in primary schools and vice versa in upper primary school.

 Insufficient infrastructure in schools in terms of certain essential facilities: Some of the essential facilities that are required to be provided in schools are drinking water, separate toilets for girls and computer laboratories. While 100% and 98.32% of the elementary schools in Punjab have drinking water facilities and separate toilets for Boys, respectively, only 97.2% of the schools have separate toilets for girls. In addition, although 25.23% schools in the country on an average have computer facilities, 52.4% of schools have computer facilities in Punjab. Kerala and Gujarat have been able to provide computer facilities in 93.58% and 74.08 of elementary schools in the state.

 Lower coverage of schools under Mid-day Meal scheme as compared to other states: Mid-Day Meal Scheme is a centrally sponsored program that provides cooked meals to all children in primary schools, aiming at enhancing enrolment, retention and attendance and simultaneously improving nutritional levels among children. Percentage of schools that are providing mid-day meals in Punjab is only 94.3% while 97.61% schools in Madhya Pradesh, 98.98% school in Haryana, 98.76% school in Kerala and 88.6% schools in the country on an average are providing mid-day meals.

 Higher Pupil-Teacher Ratio at Upper Primary Level as per Right to Education norms: Pupil Teacher Ratio (PTR) at primary level in the state is 24 which is below in meeting the Right to Education (RTE) 2009 norms of 30. PTR is quite higher in comparison with other states like Kerala (17), Rajasthan and West Bengal (21) and Gujarat (23). PTR at upper primary lowest among the states under consideration and is well within the RTE limit of 35. However, PTR numbers at the district level from the AWP&B 2015- 16 (SSA) depicts different story. More than 50% schools do not fulfil the RTE norms in Taran, Muktasar, Mansa, Fazilka and Bathinda at the primary level. While at the upper primary level schools in Taran only fulfil 41.48% and Mansa (60.51%), Barnala (66.67%) and Moga (69.46%).

 Large number of untrained teachers: The problem of untrained teachers is an issue in the state. Only 94.2% of regular teachers at elementary level are professionally trained while around 82.9% of teachers are trained on average at the national level. The percentage of professionally trained regular teacher in Gujarat is 100%. Percentage of teachers received in service training in the state is 20.7%. In comparison with other states, teachers received in service training is much higher than Punjab such as Gujarat (55.1), Tamil Nadu (30%) Karnataka (35%) and Chhattisgarh (47.6%).

In addition, no training need assessment has been undertaken to prepare a training plan for teachers at the elementary level. Trainings are planned on an ad-hoc basis even though the SSA mandates undertaking a needs assessment for the same.

 Students taking paid tuition classes: There is a significant variation in the prevalence of private tuition across states. As per the ASER (Annual Status of Education Report (Rural) 2014, by Pratham foundation, around 6.5% students at primary level and 6.9% at the upper primary level studying in rural

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government schools in the state have taken paid tuition classes in the year 201422. However, paid tuition classes availed by the rural government school much lower in other states such as Chhattisgarh, Haryana and Rajasthan Himachal Pradesh, Jammu and Kashmir, Karnataka, Maharashtra, and Uttarakhand, Uttar Pradesh. At the primary level it is 0.8% in Chhattisgarh, 4.4% in Haryana, 1.4% in Rajasthan, 1.6% in Himachal Pradesh (2.4%), 5.3% Jammu and Kashmir (6.7%), 5.1% in Karnataka (5.2%), 6.0% in Maharashtra, 3.0% in Uttarakhand (4.1%), and 2.0% in (Uttar Pradesh (4.0%). At the upper primary level, it is 1.2% in Chhattisgarh, 5.1% in Haryana (5.1%), 2.3% in Rajasthan, 2.4% in Himachal Pradesh, 6.7% Jammu and Kashmir, 5.2% in Karnataka, 4.1% in Maharashtra, 4.1% in Uttarakhand, and 4.0% in Uttar Pradesh.

22 Given data constraints, percentage of students attending paid tuition classes in rural areas has been taken as the proxy indicator for majority of students who attend paid tuition classes in the state, since 62.52% of the state population belongs to rural areas (as per Census 2011)

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Table 44: Status of elementary education in Punjab viz-a-viz national average and other progressive states (2014-15)

S. Indicator Punjab Haryana Kerala Madhya Rajasthan Gujarat West Best National No. Pradesh Bengal Performing/ Average/ Highest Total 1 Overall literacy rate 76.70 76.60 93.90 70.60 67.10 79.30 77.10 Kerala (93.9) 74.00 2 Educational Development Index 0.69 0.65 0.70 0.52 0.59 0.70 0.52 Gujarat (0.693) 0.62 (composite primary and upper level) 3 GER- Primary (2013-14) 105.60 98.40 95.40 111.50 101.50 101.10 104.00 Madhya Pradesh 101.40 (111.5) 4 GER- Upper Primary (2013-14) 95.30 94.20 98.30 100.70 84.60 90.90 99.60 Madhya Pradesh 88.08 (100.7) 5 NER- Upper Primary (2013-14) 70.13 68.60 82.30 76.10 62.00 68.40 73.00 Kerala (82.3) 70.20 6 Gender Parity Index (I-V) (2014-15) 0.82 0.84 0.95 0.91 0.87 0.87 0.97 West Bengal 0.93 (0.97) 7 Gender Parity Index (VI-VIII) (2014- 0.79 0.82 0.95 0.98 0.81 0.82 1.08 West Bengal 0.95 15) (1.08) 8 Primary schools/ section per 9.00 6.00 6.00 13.00 13.00 7.00 10.00 Rajasthan & MP 9.00 thousand population (6 to 11 years) (13) (2014-15) 9 Upper Primary schools/ section per 10.00 8.00 5.00 11.00 14.00 9.00 4.00 Rajasthan (14) 8.00 thousand population (11 to 14 years) 10 Ratio of primary to upper primary 1.60 1.30 1.80 2.10 1.60 1.30 4.30 Haryana & 2.04 Gujarat (1.3) 11 Average SCR at primary level (should 29.00 27.00 24.00 27.00 21.00 30.00 32.00 24 out of 35 30.00 be <30) states/ UTs have SCR <30 12 % of SCR with > 30 at Primary Level 17.90 27.20 15.90 19.60 17.70 32.00 23.80 Kerala 27.50 (2014-15) (15.9) 13 % of SCR with > 35 at Upper Primary 19.60 25.60 19.10 23.70 14.50 25.70 57.80 Rajasthan (14.5) 29.00 Level (2-14-15) 14 Transition from primary to upper 97.10 97.10 - 85.80 88.20 97.90 96.00 Gujarat (97.9) 89.70 primary level (2014-15) 15 Average drop-out rate- Primary 1.30 0.40 - 10.10 8.40 0.80 2.90 Haryana (0.08) 4.30 (2014-15) 16 Average drop-out rate- Upper 2.85 2.55 - 11.70 6.03 5.55 4.31 Haryana (2.55) 3.70 Primary (2014-15) 17 % schools having drinking water 100.00 100.00 100.00 100.00 98.00 99.93 95.83 Punjab, Haryana, 98.11 facilities (2014-15) Kerala, Madhya Pradesh (100) 18 % schools having functional girls 98.32 98.47 98.76 90.40 96.98 99.97 87.31 Gujarat (99.97) 92.54 toilet (2014-15

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S. Indicator Punjab Haryana Kerala Madhya Rajasthan Gujarat West Best National No. Pradesh Bengal Performing/ Average/ Highest Total 19 % schools having computer 52.40 46.06 93.58 14.34 28.40 74.08 12.12 Kerala (93.58) 25.23 20 % schools providing mid-day meal 94.30 98.80 98.76 97.61 97.50 95.95 97.52 Haryana (98.80) 88.60 (government and aided management) 21 % single teacher schools 1.13 1.18 0.04 o 4.47 0.45 0.98 Madhya Pradesh 3.12 (0) 22 Pupil Teacher Ratio- Primary 24.00 31.00 17.00 25.00 21.00 23.00 21.00 30 out of 36 27.00 states/ UTs have PTR<30 23 Pupil Teacher Ratio- Upper Primary 17.00 24.00 19.00 39.00 20.00 24.00 34.00 31 out of 35 27.00 states/ UTs have PTR<35 24 Percentage of professionally trained 94.20 99.70 99.90 88.90 97.30 100.00 57.30 Gujarat (100) 82.90 regular teachers 25 % Teachers Received in-Service 20.70 2.00 13.80 7.10 5.70 55.10 16.60 Gujarat (55.1) 18.30 Training 26 Percentage students in govt. schools 6.50 4.40 9.10 6.70 1.40 8.10 58.40 Rajasthan (1.4) 15.70 (rural) attending paid tuition classes (Std I-V) in 2014 27 Percentage students in govt. schools 6.90 5.10 12.40 8.40 4.10 10.30 76.20 Rajasthan (4.1) 20.20 (rural) attending paid tuition classes (Std VI-VIII) in 2014 28 Percentage students in all schools 25.00 17.90 25.20 10.40 6.00 13.00 67.00 Rajasthan (6) 23.80 (govt. + pvt.) (rural) attending paid tuition classes (Std I-V) in 2014 29 Percentage students in all schools 21.20 14.00 33.70 11.50 6.40 15.80 77.30 Rajasthan (6.4) 26.60 (govt. + pvt.) (rural) attending paid tuition classes (Std VI-VIII) in 2014 Source: DISE 2014-15 Note: Data for indicator numbers 23 and 24 have been obtained from ASERs (Annual Status of Education Report) for various states for the year 2014

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ii. Secondary and Senior Secondary Education A comparative assessment of the key PIs under secondary and Senior Secondary education in Punjab viz-a-viz the national average and some other progressive states in 2014-15 is presented in Table 45.23 Following are the main observations to be noted:

 Low GER and NER: Gross and net enrolment ratio at secondary level in Punjab is 86.39% and 47.48% respectively which is very low as compared to the other states. %). Kerala has the highest GER of 103.24% NER of %. At the Senior Secondary level, GER (69.39%) and NER (39.42%) are even lower, although the national average is also not very high as compared to West Bengal. Other state which has higher GER and NER in Senior Secondary education is Tamil Nadu with 77.52%. High drop-out after primary and upper primary level is the primary reason for such low enrolments.

 Low gender parity: Similar to the case of elementary education, GPI at secondary level in the state is quite low (0.77) which is very low as compared with national average (0.9). Chhattisgarh has the highest GPI of 1.02. Low enrolment due to high drop-outs paired with high GPI indicates that drop-out at secondary level is high for both girls and boys in the state. Department officials have informed that main reasons for drop-outs at secondary level are societal pressure for girls and need to earn a living for the family for boys. GPI at Senior Secondary level in Punjab (0.8) is low as compared to the national average (0.89). However, Kerala and West Bengal have a GPI of 1.08 and 1.054 respectively at the Senior Secondary level.

 Low SCR: SCR at secondary level (32) is lower than the national average (47), SCR at Senior Secondary level (39) is much lower than all states’ average (49. SCR of 50 or above does not indicate very good conditions in terms of school infrastructure available Punjab.

 High transition rate: Transition rate from elementary to secondary (93.43%) and from secondary to Senior Secondary (86.33%) are very high in comparison with other states. Only Kerala has 99.5% transition rate from elementary to secondary level.

 High PTR at Senior Secondary level: PTR of 30 at secondary level meets the RMSA requirement. However, PTR at Senior Secondary level is 32 which is low as compared to the national average of 38%. Moreover, given the level of difficulty at higher levels of education and the variety of subjects offered, PTR should in fact be lower than at the Senior Secondary level. There are some districts which has PTR more than 40 such as Taran (51), Nawanshahar (42), Mansa (50) and Fazilka (47).

Table 45: Status of secondary and Senior Secondary education in Punjab viz-a-viz national average and other progressive states (2014-15)

S. Indicat Lev Punja Gujar Haryan Rajasth Chhattisga Keral MP West Best Performing/ Nation N or el b at a* an rh a Beng Highest al Avg/ o al Total (WB) 42.9 Net SS 48.16 47.73 49.42 39.79 55.75 74.89 40.28 Kerala (74.89) 48.86 9 1 Enrolme 23.9 nt Ratio SSS 38.03 29.44 33.69 30.02 29.29 55.15 23.92 Kerala (55.15) 32.68 7 103.2 80.1 Gross SS 85.59 74.34 84.25 76.16 101.82 78.17 Kerala (103.24) 78.58 4 8 2 Enrolme 45.4 nt Ratio SSS 71.16 44.93 65.78 56.46 63.34 76.87 49.95 Kerala (76.87) 54.21 8 Gender SS 0.77 0.70 0.78 0.72 1.02 0.94 0.87 0.92 Chhattisgarh (1.02) 0.9 3 Parity Index SSS 0.80 0.77 0.77 0.66 0.95 1.08 0.80 1.05 Kerala (1.08) 0.89 4 Student SS 32 48 34 35 53 37 51 74 Punjab (32) 47

23 A single source for all states for more recent years (2011-12 or 2012-13) was unavailable, hence figures for 2010-11 has been considered for analysis

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S. Indicat Lev Punja Gujar Haryan Rajasth Chhattisga Keral MP West Best Performing/ Nation N or el b at a* an rh a Beng Highest al Avg/ o al Total (WB) Classroo SSS 39 43 34 38 38 43 40 60 Haryana (34) 49 m Ratio Transitio n rate- elementa 78.8 5 93.43 85.16 94.27 90.62 90 99.52 92.58 Kerala (99.52) 91.58 ry to 3 secondar y Transitio n rate- 6 86.33 62.74 76.08 64.44 58.47 73.34 56.6 75.35 Punjab (86.33) 67.7 secondar y to SSS % 90.5 SS 99.66 99.63 99.55 99.5 91.16 99.89 99.33 Kerala (99.89) 96.53 schools 7 7 with girls SSS 99.62 99.88 99.33 99.48 92.41 99.86 95 99.52 Gujarat (99.88) 97.43 toilet % 90.0 SS 97.78 84.98 98.81 89.1 93.09 99.02 99.52 West Bengal (99.52) 90.36 schools 3 8 with 91.8 library SSS 98.9 89.06 99.36 92.66 94.55 99.55 94.43 Kerala (99.55) 92.37 3 facility % 44.9 SS 71.26 53.7 71.35 18.15 23.84 78.15 23.75 Kerala (78.15) 41.28 schools 7 with 9 integrate SSS d science lab Haryana (14) PTR should be Pupil SS 17 34 14 23 33 17 40 37 27 <=30 10 Teacher Haryana (18) PTR should be Ratio SSS 32 31 18 39 26 20 40 56 38 <=30 28.7 SS 12.36 28.25 22.8 30.6 Punjab (12.36) Dropout 9 11 rate 26.0 IX-X 8.83 11.65 12.51 18.77 Punjab (8.83) 9 Source: State Report Cards, DISE

B. Intra-State Comparative Assessment Earlier sections have dealt with the state’s performance with respect to other states and all India average and certain important indicators performance over the years. However, the different parts of the state are not at the same levels in all dimensions, given its geographical and political variance. The central districts or districts near Chandigarh or Haryana have different considerations than the districts near boarder areas (Jammu region). This section would highlight the district wise performance on certain important indicators, which would help the department to concentrate on the concerned areas in efficient manner.

Table 46: District-wise comparison on Transition Rate and Dropout Rate

Districts Transition Rate Dropout Rate PS to UPS UPS to SS SS SSS Boys Girls Boys Girls Boys Girls Boys Girls Amritsar 95.77 94.96 93.83 91.59 3.44 5.35 9.24 6.72 Barnala 96.94 97.89 94.10 95.31 7.58 5.45 13.92 10.40 Bathinda 96.82 96.69 94.39 92.38 9.82 7.48 6.31 6.78 Faridkot 93.81 94.23 91.60 90.58 7.63 5.53 12.66 7.97 Fazilka 96.31 96.81 91.43 87.53 6.02 8.59 6.78 12.61 Ferozepur 95.22 92.52 93.44 91.68 6.54 5.70 12.05 4.15 F.G.Sahib 96.65 99.13 97.67 94.41 5.35 5.02 11.73 8.24 Gurdaspur 99.80 97.70 94.01 93.32 2.71 4.14 5.44 6.74 Hoshiarpur 96.01 96.05 97.23 94.90 4.40 4.39 12.34 9.23 Jalandhar 101.17 101.70 98.45 96.90 1.60 2.26 10.50 5.05 Kapurthala 97.85 97.55 94.18 93.25 4.33 4.69 10.61 6.77

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Districts Transition Rate Dropout Rate Ludhiana 96.74 96.95 93.19 91.12 5.76 6.71 9.78 8.05 Mansa 98.92 99.78 94.64 93.59 6.40 5.45 11.17 8.56 Moga 95.54 96.16 93.57 95.33 6.79 4.53 9.56 6.70 Mohali (SAS.N) 97.46 96.05 96.07 88.84 2.64 9.40 11.43 11.38 S. Mukatsar. S 97.86 98.33 83.45 81.33 14.39 13.15 8.28 9.34 Nawanshahar (SBS 98.66 99.66 95.59 94.69 6.09 4.68 15.27 10.55 Nagar) Pathankot 97.56 96.66 96.33 93.92 2.38 4.04 10.37 9.13 Patiala 96.63 97.04 94.25 92.05 6.93 5.85 9.44 6.78 Ropar/ Rupnagar 99.03 99.62 95.89 94.05 5.35 5.09 13.23 9.93 Sangrur 96.75 97.24 94.84 93.77 6.25 5.08 11.69 12.02 Tarn Taran 93.62 92.29 90.34 88.19 2.94 6.97 10.49 14.59 Punjab 97.05 97.05 94.02 92.21 5.70 5.89 10.56 8.71

Table 47: District-wise comparison on NER and PTR

Districts Net Enrolment Ratio (NER) Pupil-Teacher Ratio SS SSS (PTR) Boys Girls Boys Girls PS UPS SS SSS Amritsar 48.64 46.39 38.11 36.07 32 25 18 33 Barnala 51.37 52.06 37.21 37.98 35 31 20 34 Bathinda 41.37 42.93 34.70 36.42 32 23 18 25 Faridkot 46.02 47.05 33.62 36.82 26 21 14 25 Fazilka 50.45 52.93 39.19 39.91 25 17 17 27 Ferozepur 38.64 35.32 29.89 24.21 31 26 17 47 F.G.Sahib 39.80 38.45 31.17 28.32 32 29 21 38 Gurdaspur 47.54 47.73 43.05 40.87 23 18 15 34 Hoshiarpur 59.59 58.55 45.81 48.17 23 15 14 34 Jalandhar 54.69 60.19 39.77 46.41 28 22 20 26 Kapurthala 52.16 50.68 41.29 45.68 24 18 15 27 Ludhiana 49.66 50.52 38.75 42.90 31 22 15 27 Mansa 43.94 44.59 35.70 35.94 32 31 21 50 Moga 42.89 45.18 32.45 39.44 34 28 21 34 Mohali (SAS.N) 44.43 41.42 31.69 30.94 30 16 14 21 S. Mukatsar. S 39.39 40.69 28.53 32.89 25 19 20 42 Nawanshahar (SBS 51.12 47.78 40.11 42.71 19 18 15 38 Nagar) Pathankot 62.86 65.46 50.04 53.69 31 25 18 30 Patiala 54.44 53.83 42.89 44.21 22 16 18 27 Ropar/ Rupnagar 49.96 46.70 40.47 39.85 31 21 21 37 Sangrur 49.22 51.47 35.97 38.79 31 22 15 29 Tarn Taran 42.81 38.12 35.40 28.38 40 42 26 51 Punjab 48.23 48.09 37.54 38.66 29 23 18 33

C. Assessment on own past trend i. Status of and trend in performance indicators at Elementary Education level Table 48 presents the status and trend in key PIs for elementary education in Punjab in the past five years (2009-10 to 2013-14). Following are the observations made:

 High NER and GER but on Declining mode: The state has achieved 90.23% enrolment in the official age group for primary education given an NER of 90.45% in 2012-13 as compared to 79.8% in 2009-10. At upper primary level, NER has been growing at a steady rate, rising from 63.84% in 2009-10 to 78.6% in 2013-14. Similar trend can be seen in GER at the primary level and upper primary level. GER for boys has

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been increasing at a steady rate, rising from 94.11% in 2009-10 to 103% in 2013-14. NER for boys in both primary and upper primary schools has fall in the last year. NER growth rate of girls at the primary and upper primary level are 3.96% and 6.28% whereas NER growth rate for boys is lower than that of girls with 2.44% at primary level and 4.56% at upper primary level.

It may be noted in the context that the concerned Department official confirmed that enrolment at the primary and upper primary level is on its declining mode. Multiple reasons attributed by them are decline in enrolment among select social communities; while others include preference of boys over girls for private schools (generally unrecognised private schools) which is not on record, boys being forced to drop schools to help parents in daily earning after certain age etc.

 Declining Enrolment Amongst Social Communities: Schedule Caste (SC) and Schedule Tribe (ST) occupy about 31.9% and 0% of total state population respectively (as per Census 2011) while Muslims occupy about 1.57 % of the total state population (as per Census 2011). With respect to this, percentage of SC, ST or Muslims in total gross enrolment is higher than their share in total state population. While percentage enrolment for STs has been steadily increasing over the past 5 years (both at primary & upper primary levels) by 7.46% CAGR and Muslims (upper primary level) at 9.33% CAGR, there has been a drop in enrolment for SCs both at (primary & upper primary levels) by (-6.10%) & (-2.47%) and Muslims at primary level by (-0.63%) over the 5-year period respectively.

This indicates that although the state has undertaken measures to give equal importance to the minority communities, it still needs to pay greater attention towards the SC and Muslim communities in order to reduce social gaps. In addition, almost 50% of the enrolled candidates amongst the SC/ ST/ Muslims comprise of girls indicating no gender disparity in enrolment amongst minority communities. Lower enrolment could be due to boys dropping out more to support their families, high opportunity cost for the parents in sending the children to school. It is also reported that communities in rural areas are engaged in farming and seek their children to help in harvesting season in farming activities.

 Steady GPI at Primary Level and Decreasing GPI at Upper Primary Level: GPI has been around 0.82% at the primary level while it has decreased at the upper primary level by (-.93%) CAGR.A GPI of 1 indicates parity between the sexes; a GPI that varies between 0 and 1 typically means a disparity in favour of males; whereas a GPI greater than 1 indicates a disparity in favour of females.

 High Drop Outs: Annual average drop-out rate at both primary and upper primary level in 2011-12 has been higher for boys than for girls with an average drop-out rate of 1.59% and 1.72% at primary level and upper primary level, respectively. Drop-out rate at primary level increased to 1.99% in 2012-13 from 1.82% in 2009-10 respectively. With an aim of universalisation of elementary education, the state needs to take steps like providing incentives, spreading awareness on importance of education, etc. to ensure that the students do not drop-out at such early levels of education. In this respect, it should be noted that transition rate from primary to upper primary level has been increasing steadily over the past 5 years with 97.61% of enrolled students at primary level moving onto upper primary in 2012-13. This indicates the possibility of further reduction in drop-out rates in the coming years.

 Adverse SCR: About 80.8% of schools at primary level and 86.4% of schools at upper primary level (as of 2011-12), have adverse SCR as per SSA norms indicating that the state needs to construct more classrooms, either by opening more elementary schools or constructing more classrooms in existing schools.

 Low PTR at both primary & upper primary level: While PTR at primary level meets the RTE norm of 30, PTR at upper primary level is very low (12) as compared to the RTE norm of 35. In addition, while the percentage of schools with adverse PTR at primary level has increased in 2012-13 as compared to the previous year, the same has been increasing by 4.57% CAGR at the upper primary level over the past 5 years. The state should, thus, recruit or appoint more teachers at the upper primary level in order to rationalise the PTR as per the RTE towards improving the quality of education.

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 Improving school facility infrastructure: About 2.5% of elementary schools do not have separate toilet for girls while 5.16% do not have libraries. The SSA, which started in 2001, prescribes both as a must requirement in all elementary schools.

Table 48: Past trend in performance indicators at elementary levels- DSE, GoP

Sl. PI at Outcome/ Stage Category 2009-10 2010-11 2011-12 2012-13 2013-14 Trend No Output level Growth 1 Net Enrolment Primary Boys 81.23 82.75 88.39 92.05 89.45 2.4% Ratio Girls 78.08 87.85 85.91 88.55 91.19 4.0% Total 79.80 85.05 87.27 90.45 90.23 3.1% Upper Boys 65.90 74.73 73.38 84.75 78.78 4.6% Primary Girls 61.43 62.87 67.07 78.53 78.37 6.3% Total 63.84 69.26 70.47 81.90 78.60 5.3% 2 Gross Enrolment Primary Boys 95.84 96.35 95.32 106.52 102.30 1.6% Ratio Girls 92.01 92.81 92.90 102.72 104.44 3.2% Total 94.11 94.75 94.23 104.78 103.25 2.3% Upper Boys 78.19 81.54 79.99 99.96 92.29 4.2% Primary Girls 72.22 74.01 73.05 92.32 91.96 6.2% Total 75.44 78.07 76.79 96.46 92.14 5.1% 3 % enrolment Primary SC 48.33 38.88 38.97 38.52 37.57 -6.1% share of various ST 0.03 0.02 0.01 0.02 0.04 7.5% social Muslims 1.60 1.44 1.59 1.34 1.56 -0.6% communities Upper SC 41.46 35.96 36.77 37.58 37.52 -2.5% Primary ST 0.03 0.01 0.01 0.01 0.04 7.5% Muslims 1.33 1.21 1.22 1.58 1.90 9.3% 4 % enrolment Primary SC 47.17 46.45 46.49 46.77 47.00 -0.1% share of girls in ST 47.78 44.12 37.29 46.87 51.49 1.9% the community Muslims 45.96 45.75 45.27 45.69 46.38 0.2% Upper SC 47.11 46.05 46.04 45.98 46.08 -0.6% Primary ST 23.84 39.77 33.90 57.89 41.27 14.7% Muslims 45.05 47.25 46.05 45.99 46.36 0.7% 5 Gender Parity Primary 0.83 0.80 0.81 0.82 0.82 -0.3% Index Upper 0.82 0.78 0.78 0.78 0.79 -0.9% Primary 6 Annual Average Primary Boys 1.50 1.91 1.59 1.99 1.30 -3.5% Drop-out Rate Girls 2.21 1.65 1.50 1.98 2.85 6.6% Total 1.82 1.80 1.55 1.99 2.08 3.3% Upper Boys - - 1.72 2.58 - Primary Girls - - 1.32 3.04 - Total - - 1.54 2.78 - 7 Transition Rate Primary to Boys - 98.41 99.42 97.72 - Upper Girls - 98.35 99.22 97.46 - Primary Total 83.53 98.39 99.33 97.61 - 8 % of schools with Primary - 74.81 79.80 80.80 80.50 81.60 2% adverse SCR Upper - 79.49 86.00 86.40 80.60 81.40 1% Primary 9 Pupil Teacher Primary - 31.00 22.00 22.00 20.00 19.00 -12% Ratio Upper - 28.00 17.00 17.00 16.00 12.00 -19% Primary 10 % of schools with Primary - 59.40 72.60 70.20 78.50 79.60 8% adverse PTR Upper - 77.19 93.80 93.60 93.80 92.30 5% Primary 11 % of schools Elementary - 37.10 1.90 14.70 3.80 2.50 -49% without separate girls toilet 12 % of schools Elementary - 13.21 10.49 3.90 5.16 -21% without library 13 % children in Elementary - 10.10 10.50 11.90 15.30 13.40 6% govt. schools attending paid

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Sl. PI at Outcome/ Stage Category 2009-10 2010-11 2011-12 2012-13 2013-14 Trend No Output level Growth tuition classes 14 % children in Elementary - 39.00 17.80 24.90 28.50 32.80 17% govt. + pvt. schools attending paid tuition classes Source: State Report Cards, DISE, ASER and AWP&B SSA, 2015-16 Note: Data on indicator numbers 13 and 14 have been obtained from ASER

ii. Status of and trend in performance indicators at Secondary and Senior Secondary Education level Table 49 below presents the status of and trend in key performance indicators for secondary and Senior Secondary education in Punjab in the past five years (2010-11 to 2014-15).

 Low Enrolment: Although GER at secondary level has increased from 69.36% in 2010-11 to 85.59% in 2014-15, it has been decreasing over the past 3 years (2012-12 to 2014-15) by -1.82% CAGR, hence the state needs to undertake major steps in order to increase enrolments in order to meet its aim of universalisation of secondary education. On a similar line of elementary education, at the secondary level, boy’s enrolment is affected most and has been on a declining mode from 90.66% in 2012-13 to 85.72% in 2014-15.

 Reducing Gender Parity: The state stands well in terms of maintaining gender parity at the secondary level over the last few years (2012-13 to 2014-15) but the GPI has seen a decrease from 0.84% in 2010-11 to .79% in 2014-15.

 Low Drop Outs: There has been a decrease in annual average drop-out at secondary level from 9.8% in 2012-13 to about 8.83% in 2013-14 average for boys and girls. The dropout rate at 10th level is highest and has declined from 15.22% in 2013-14 to 12.36% in 2015-16.

 Low PTR: PTR at both secondary and Senior Secondary level have been increasing over the 5 year period for the state. While the RMSA mandates a PTR of 30 at secondary level, the state has a PTR of 17 as of 2014-15 and the RMSA mandate for PTR at Senior Secondary level stands at 35, although the state has a PTR of 28 as of 2014-15. However, Annual Plan 2015-16 depicts PTR for secondary education is 32 which is higher than the mandate.

 Increasing Pass Percentage: Pass percentage at the secondary level has been steady at 89.7% in 2010- 11 to 89.42% in 2013-14 it has seen an increase at the Senior Secondary level from 86.19% in 2010-11 to about 90.33% in 2013-14. Girls have outperformed boys in all communities in pass percentage.

Table 49: Past trend in performance indicators at secondary and senior secondary level- DSE, GoP

S. PI at Outcome/ Stage Trend 2010-11 2011-12 2012-13 2013-14 2014-15 No. Output level Category Growth 1 Gross Enrolment Ratio SS Boys 67.88 90.66 86.37 86.73 -2.19% Girls 71.03 86.44 83.03 86.22 -0.13% Total 69.36 88.8 84.90 86.50 -1.30% 2 Gross Enrolment Ratio SSS Boys 70.54 70.41 -0.10% Girls 69.47 72.12 1.89% Total 70.07 71.16 0.78% 3 Net Enrolment Ratio SS Boys 46.98 48.23 1.32% Girls 46.77 48.09 1.40% Total 46.89 48.16 1.35% 4 Net Enrolment Ratio SSS Boys 42.54 40.54 37.54 -3.77% Girls 40.11 40.11 38.66 -1.82% Total 41.47 38.03 -4.24%

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S. PI at Outcome/ Stage Trend 2010-11 2011-12 2012-13 2013-14 2014-15 No. Output level Category Growth 5 Gender Parity Index SS 0.84 0.79 0.78 0.77 -1.27% 6 Gender Parity Index SSS 0.83 0.81 0.8 -1.82% 7 Annual Average SS Boys 9.4 8.93 Drop-out Rate Girls 10.3 8.71 Total 9.8 8.83 8 Pupil Teacher Ratio (PTR) SS 10 20 18 17 -7.80% SSS 18 30 31 28 -3.39% 10 Pass percentage SS 89.7 90.54 89.42 SSS 86.19 85.29 90.33 Source: State Report Cards, DISE

4.4.1.4 Past expenditure analysis of the department

This section analyses trends in past expenditure of DSE for the period 2010-11 to 2014-15 (RE) as compared to the present, i.e. 2015-16 (BE). Expenditure under the departmental budget is classified into four categories Plan expenditure (SP), Non Plan expenditure (NP), expenditure under Central Sector schemes that are routed through the state budget and expenditure under Centrally Sponsored Schemes that are also routed through the state budget (CS).

Total expenditure of the department, captured under the demand number 05, is listed in Table 50. Total departmental expenditure has more than tripled in the past 5 years growing at a CAGR of 16.26%.

Table 50: Expenditure under DSE, GoP

Item 2010-11 2011-12 2012-13 2013-14 2014-15 (RE) CAGR

Department expenditure 38,840 43,760 51,090 51,180 70,950 16.26% (in INR million) Source: IFMS, Punjab

Increase in departmental expenditure can be attributed to increase in both plan and non-plan expenditure. Table 51 shows CAGR of plan and non-plan expenditure of the department for the last five years. As can be seen, while state plan expenditure has grown at the CAGR of 64.40% over the past five years, non-plan expenditure has also grown at CAGR of 13.30%. Higher growth in plan expenditure as compared to non-plan expenditure indicates an increased capacity of the state to undertake bigger agenda for developmental projects/ programs owing to the decline in the percentage share of non-plan committed liabilities in total expenditure.

Table 51: Trend growth in components of department expenditure for the period 2010-11 to 2014-15 (RE)

Category CAGR Category CAGR

State Plan 64.40% Central Sector 9.06% Total departmental Non Plan 13.30% 16.26% expenditure Source: IFMS, Punjab

Further, in 2014-15RE, non-plan expenditure accounted for 78.43%% of total expenditure under the department, as compared to 86.66% in 2010-11, a decrease of 8% points over the last five years as exhibited in below Table 52. On the other hand, share of state plan expenditure has increased by 4% over the same period. This re-emphasises the point that the department has had increasing resources to meet its developmental agenda.

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Table 52: Share of Plan and Non Plan Expenditure in Total Expenditure- DSE

Share in total expenditure 2010-11 2011-12 2012-13 2013-14 2014-15 (RE)

Central Sector Scheme 1.06% 0.17% 0.17% 1.02% 0.82% State Plan 1.30% 2.04% 2.81% 11.50% 5.20% Centrally Sponsored Scheme 10.69% 3.69% 3.22% 10.18% 15.55% Non Plan 86.95% 94.10% 93.81% 77.30% 78.43% Source: IFMS, Punjab *Elementary department has not provided non-plan data for 2013-14; ** Non-plan data is actual for 2014-15

Given the state’s aim of universalising elementary and secondary education, plan expenditure by the department under these two heads has been analysed as presented in Table 53. Although share of secondary education in total plan expenditure has been growing over the past years, it has grown t0 51.82% in 2013-14 as compared to 21.53% in 2010-11 of the plan expenditure in 2013-14.

Table 53: Share of elementary and secondary education in department plan expenditure

Sub Major Description 2010-11 2011-12 2012-13 2013-14 Head

1 Elementary Education 78.47% 70.43% 65.84% 48.18%

2 Secondary Education 21.53% 29.57% 34.16% 51.82% Source: Annual Plan, various years

The reason for the growing expenditure of secondary education is: state government has launched many schemes at the secondary level like scholarship scheme, improvement of laboratories, Adarsh Schools, etc. Secondary education Plan expenditure has grown at CAGR of 163%. In addition, non-plan expenditure of secondary education has also increased at CAGR of 20%. Table 54 represents share of secondary and elementary non-plan expenditure of department. While elementary education expenditure has increased by 11% from 2010-11 to 2015-16 BE, secondary education still has major share in department non-plan expenditure.

Table 54: Share of Elementary and Secondary education in department non-plan expenditure

Description 2010-11 2011-12 2012-13 2013-14* 2014-15 (RE) 2015-16 (BE) Elementary Education 18.16% 21.63% 21.07% 0.33% 24.59% 29.10% Secondary Education 81.84% 78.37% 78.93% 99.67% 75.41% 70.90% Source: Department of School Education, Punjab *Elementary department has not provided non-plan data for 2013-14.

An analysis of the department’s actual expenditure as a percentage of BE under various major heads (Table 55) reveals that the department has not been utilising the entire funds allocated under capital head of accounts. In 2011-12, only 30% of total budgeted capital outlay on school education was spent which later increased to 65% in 2012-13 (RE).

Table 55: Actual expenditure as a % of BE under various major heads under DSE

Major Description 2008-09 2009-10 2010-11 2011-12 2012-13 (RE) Head 2202 General Education 100.90% 101.54% 111.04% 99.27% 106.76% 2204 Sports and Youth Services 91.95% 87.56% 78.38% 70.30% 100.31% 2251 Secretariat- Social Services 97.29% 99.24% 103.52% 101.19% 100.00% 2551 Hill Areas 0.00% 0.00% 0.00% 0.00% 100.00% 4202 Capital Outlay on School Education 43.55% 48.47% 33.97% 30.57% 65.06% Total Departmental Expenditure 100.77% 101.45% 110.47% 98.96% 105.53%

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Source: Department Budget, various years

Table 56 presents a list of the major schemes that are presently running under the department and account for more than 90% of total plan expenditure. SSA is the largest scheme running under the department followed by the Information and Communication Technology (ICT) Project (Salary) Scheme and Mid-Day Meal Scheme. RMSA occupies around 5.2% share in total plan expenditure under the department in 2015-16 (BE).

Table 56: Schemes presently running under DSE that account for 90% of total expenditure

2015-16 (BE) S. Nature of Scheme name Share (in INR No. Scheme million) Centrally 1. Mid-Day Meal Scheme (MDM) 15.9% 2,771.9 Sponsored Centrally 2. Rashtriya Madhyamik Shiksha Abhiyan (RMSA) 5.2% 198,1 Sponsored Sarv Sikhsha Abhiyan including Education Guarantee Scheme (EGS), National Program for Education of Girls at Elementary Centrally 3. 51.1% 8,900,0 Level (NPEGEL) & Kasturba Gandhi Balika Vidyalaya (KGBV) Sponsored (65:35) Information and Communication Technology (ICT) Project 4. State Plan 17.2% 3,000.0 (Salary) Teacher Education establishment of district Institutes of Centrally 5. Education and Training (DIETS)(75:25 pattern from 2.3% 400.0 Sponsored 1/4/12)(Earlier pattern:100%)(salary) Total 91.8% 15,270.0

Sources of funds for the department

The main sources of funds for school education that are channeled through the department budget are funds from the Government of India and funds from the state government. The center provides funds for school education in the state through Central Sector Schemes and CSS. In case of CSS, the states are required to share a part of the cost, as in the case of SSA or RMSA. In case of Central Sector Schemes, the concerned ministries of the central government give 100% grants to their counterparts in the states for specified projects.

Department of School Education, GoP, receives grants from the central government under central sector schemes as well as under CSS. Currently, there are six central sector schemes namely: Assistance for appointment of Urdu teachers, Incentives to girls for secondary education, Inclusive Education for Disabled at Secondary Stage, National means cum Merit Scholarship Scheme, taking over of National Fitness Corps, and The Scheme for providing quality Education in Madrassas. CSS that are currently under implementation in the State are –Mid Day Meal Scheme, SSA, RMSA, -Construction and running of girls’ hostels for students of Secondary & Senior Secondary Schools, Information and Communication Technology in Punjab Schools, Sakshar Bharat Mission, Teacher Education establishment of district Institutes of Education and Training and Vocationalization of Education.

4.4.1.5 Scheme Review As was mentioned in sub-section 2.2.2, a limited review was carried out for schemes which impact performance on those indicators where the State’s performance is assessed as weak. It may be noted that primary data was not collected through any sample surveys as this is entirely outside the purview of MTEF preparation - for that purpose, separate Public Expenditure Tracking Surveys (PETS) and Impact Evaluation Studies (IES) are conducted.

Below observations are based on the discussions and feedback received from select concerned officers.

Vocationalization of Secondary & Higher Education

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 300 out of 600 Vocational Education (VE) schools are not functional due to shortage of teachers (1996 posts are vacant); no fund allocation to these schools since FY2014-15  Lack of modern infrastructure/ equipment in these schools  Need for revision in VE program curricula to make it relevant for employability  Need for better trained/ skilled teachers for non-IT VE courses Scope for improving quality in public educational institutions

 Increasing enrolment in private schools in elementary education reinforcing the need for better utilisation of existing public infrastructure & resources; e.g. significant no. of primary schools are in need of major & minor repairs 4.4.1.6 Institutional Review Based on select review of administrative setup/ organizational structures, departmental functions and its processes, following recommendations are proposed:

 Lack of computerised database for school teachers: Manual records are maintained at the district offices pertaining to names of teachers, their qualifications, personal details, date of appointment, date of retirement, pay scale, monthly payments made, increments, bonuses, etc. For elementary schools, the DEO (EE) is dependent on the DRCs/Headmaster of the respective circles for reliability of the inputs related to student strength, teachers’ strength, their qualification, date of appointment and expected dates of retirement, etc. Similarly, for secondary schools, the DEO (SE) is considerably dependent on the DRCs/Headmaster for reliability of the inputs related to the teachers in position and their salaries.

In this context, we acknowledge the recent development wherein the department has approved a proposal to develop a teacher database.

 Lack of documented rules/ procedures for teacher training: As already mentioned, there are no documented guidelines or rules issued by the state towards training of teachers. No training need assessment is undertaken to plan training for teachers at elementary level. Trainings are planned on an ad- hoc basis even though the SSA mandates undertaking a needs assessment for the same. The SCERT has recently undertaken a study to formulate a proper training program and rules for teachers training at elementary level. It has been proposed that the state undertakes a similar study at the secondary and Senior Secondary level.

 Absence of decision-making tool(s) to guide construction/ renovation of schools & deployment of resources: There is need for a Geographic Information System (GIS) study to undertake analysis of educational facilities in the State by location; e.g. web-based Uttarakhand School Mapping Information System; GIS enabled Decision Support System (RajDharaa) of Rajasthan.

 Need for enhanced coordination of DSE with other departments: There is very limited coordination among departments in setting-up their targets and outcomes at present. For the purpose of realising enhanced outcomes, the Department of Welfare of Scheduled Castes and Backward Classes & Department of Social Security and Women & Child Development need to coordinate with school education by planning and setting collective targets in a coordinated manner.

4.4.2 Suggesting reform interventions and estimating the associated cost implications This section presents the interventions proposed to address the issues identified in foregoing section 4.4.1. It also discusses the methodology undertaken to cost the expenditure estimates for these suggested interventions

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for the MTEF period from 2016-17 to 2018-19. Some of the interventions have not been costed because of reasons stated therein.

It may be noted in this context that the strategy adopted under this MTEF is to focus more on improving the elementary and secondary education status in the state. This is mainly because of the following reasons:

 State’s expenditure on secondary education is very low as compared to other progressive states and the national average. In 2013-14(BE), only 11.25% of the total department plan expenditure was allocated to secondary education while 88.47% was allocated to elementary education (Table 55).

 Apart from state schemes, the CSS- Sarva Shiksha Abhiyan (SSA) is a major scheme for promoting elementary education in the state. However, there is no major state plan scheme presently running under the department for secondary education except CSS-RMSA. Gross enrolment at secondary level in the state is very unimpressive when compared to that at the elementary level. In 2013-14, GER for elementary was greater than 95% (primary and upper primary) while GER for secondary level was 85.59%.

 Major concern in the state is decreasing percentage share of Scheduled Cast (SC) enrolment at the elementary level. It has decreased from 48.33% in 2009-10 to 37.57% in 2013-14 at primary level. Similarly, percentage of enrolment share of SC communities has decreased. It has decreased from 41.46% in 2009-10 to 37.52% in 2013-14. The state needs to lay a greater focus on SC community to increase their enrolment in order to achieve its objective of universalising elementary education. A. Costed Interventions

4.4.2.1 Transport/Escort Facility for the Students in Border Areas NER and GER of girls is much lower in border districts primarily due to lack of adequate security. Parents are reluctant in sending their children to school particularly at the senior and senior secondary levels. Moreover, teachers are also concerned for their own safety which leads to low number of teachers willing to teach in the schools located in border areas.

Free, escorted and dedicated transport facilities thus is recommended to be provided to girls on pooled basis or transport vouchers can be provided to the girl students (instances exist like - Delhi and Goa has ‘Free Transport facility of girls in rural areas’). A similar instance is that the Haryana Transport Department has implemented special bus services for the college-going girls in 5 districts in the first phase of the initiative in its bid to provide security to girl students during commutation.

Table 57 below represents the estimated costs associated with the suggested intervention in the next three years. The envisaged transport facilities can be operated through the Punjab Transport Department on all school-working days. Alternately, transport facilities can also be provided by contracting private partners. The districts affected and hence proposed to be covered in phased manner under this intervention are Amritsar, TaranTaran, Ferozpur, Fazilka, Gurdaspur and Muktsar. The total number of blocks in these selected districts is 40.

Table 57: Transport / Bus Services Facilities in Border and Remote Areas (in INR million)

Particulars Assumption/ Basis 2016-17 2017-18 2018-19 5 buses per block in the Number of Buses identified 6 border area 660 670 670 districts Reference: Scheme Per Bus cost @ INR 2 million 2 2 2 operational in Goa24

24 In 2013, the Directorate of Education, Government of Goa implemented a transport facilities scheme to the children studying in Government High School and Senior Secondary School who have their residential places to remote areas. The basis of per bus cost is, cost proposed in circular released by Government of Goa “Scheme to Provide Transport Facilities to the student of government high schools/Senior Secondary schools” dated 21 July 2013 and an annual inflation adjustment of 7%.

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Total cost of new buses (INR 100,000) 132 134 134 Recurring Expenditure @ 0.3 million per Reference: Scheme 19.8 20.1 20.1 Bus operational in Goa25 Total cost of providing bus services 151.8 154.1 154.1

4.4.2.2 Technology Aids to Improve Transition and Retention Rate Transition and Retention rates from PS to UPS level/ UPS to SS level declined during FY 2013-15. As discussed with the department officials, these rates are low in remote/rural areas primarily due to the lack of enough awareness about the importance and benefits of education. Shortage of teachers has been also reported. Performance on these indicators is reported to be worst in Mohali, Muktsar, and Pathankot and Ludhiana. An efficient system for providing high quality, technological interventions is required to meet the needs of all students.

In this context, technology infusion into classroom instruction has gained momentum recently in both developed and developing countries. The concept of technology integration is now viewed as a fundamental part of successful teaching and has gained the interest of many private schools to encourage children to learn with entertainment.

Punjab is already running EDUSAT program and has covered secondary level extensively. We understand that EDUSAT cannot be implemented at the wide primary level due lack of infrastructure and high cost of acquiring technology and running expenses. Hence, instead of implementing EDUSAT at that level, it is proposed that TVs (42”) are set up in each school at primary level in these 4 districts lagging behind on these indicators - which can help arrest the declining trend of transition and retention rates.

Table 58: Technology Intervention - Installation of TV at Primary Level (in INR million)

Description Basis/ Assumptions 2016-17 2017-18 2018-19

Total Number of schools to be covered PS in Selected Districts26 725 725 725 Installation of LFD TV EDUSAT TV Rate 29 29 29 Cost Effective & timely Solar panel @ 20,000 15 15 15 availability27 Supply & installation of broadcasting EDUSAT Multimedia equipment/multimedia content (one-time 10 0 0 Content cost) Total 54 44 44

B. Non-Costed interventions

4.4.2.3 Need for improvement in repair and maintenance of schools Buildings in poor or dilapidated conditions contribute to low gross enrolments. As informed by the department officials, a considerable number of school buildings under the department are not in a good condition due to

25 The basis of the recurring expenditure is circular “Scheme to Provide Transport Facilities to the student of government high schools/Senior Secondary schools” dated 21 July 2013. 26 Total number of primary school in Mohali (451), Muktsar (329), Pathankot (389), and Ludhiana (1006) districts were selected on the basis of low transition and retention rate at primary level. 27 Most of the schools are not electrified. Also, electricity may not be available during school time. Solar panel generate free electricity by converting sunlight into electricity or transferring the sun's heat to heating. It is one- time investment and also easy handled.

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insufficient repair and maintenance of schools. The state, thus, needs to improve its focus on repairing the school buildings that are in poor condition and establish a better policy for their repair and maintenance.

Under SSA, fixed maintenance cost is separately allocated for all schools at elementary level while for secondary education, the state has allocated a separate budget for repair and maintenance of school buildings. It is suggested that the state identify the reasons for improper repair and maintenance which exist despite separate budget allocations for the same and take necessary steps towards it.

4.4.2.4 Performance Linked Teacher Incentive Scheme at Elementary level As has already been noted, the percentage of students studying in elementary government schools that are taking paid tuition is high in Punjab as compared to that of most of the other states. To address this phenomenon, a comprehensive plan of actions targeted at improving quality of education is required so as to discourage students taking recourse to private tuitions. This should include at least the measures like ensuring adequacy of teachers and improving the PTR, training plans prepared by the state to ensure that the teachers are trained to teach in simpler language and are able to establish such rapport with the students that they are comfortable asking questions related to any subject. In fact, the RTE Act has mandated that no teacher shall engage himself or herself in private tuition or private teaching activity. In this respect, some system to keep a check on the school teachers taking private tuitions can also be formulated by the state.

In this context, it may also be useful to link awarding teachers for good performance of students observed. This may go a long way in not only motivating/incentivizing teachers to perform better but also improve classroom experience of students. This will also discourage them to take private tuitions. This, in addition, will also help in monitoring teachers’ performance.

4.4.2.5 Improve PTR in all districts at primary, upper primary and Senior Secondary level by 2018-19 to meet the prescribed norms As shown earlier, PTR in Punjab at primary level (29) and upper primary level (22) is much lower than the RTE norm of 30 and 35. However, PTR at primary and upper primary level in some districts is higher than the RTE norms in 10 districts of Malwa region and 2 districts of Majha region28 whereas, other districts have lower than the specified norms. At the upper primary level, 8 districts have PTR lower than 20.

At senior secondary level, PTR should be lower (as compared to secondary level) given the level of difficulty and the variety of subjects taught. However, Punjab has overall PTR of 32 at Senior Secondary level but at the district level, it is much higher. PTR in some of the district is much higher. These districts are either border districts or SC populated such as Taran (51), Mansa (50), Fazilka (47) and Nawanshahar (42). Out of these, there are 8 more districts where PTR is more than 30. The reason for the shortage of the teachers in senior secondary is the retirement factor. Schools in border areas and economically backward areas are driven by too few teachers coming in than too many going out.

Additionally, percentage of single teacher schools at primary level (only primary level) is much higher in the states. Almost 8 districts in Malwa region29 of Punjab has more than 10% of single teacher schools at primary level. 9% of the primary schools have only one teacher in the state. Whereas at the upper primary level, only two districts have more than 10% of single teacher schools. Overall 3.8% of UPS have single teacher schools. While percentage of single classroom primary school and upper primary level is much lower. Only one district has more than 5% single class room primary school.

As per the AWP&B 2015-16 of SSA prepared by the state, a total of 17,986 (primary 6840 and upper primary level 11146) vacant posts of teachers in the State which has serious implications on the quality of teaching. It is also observed that the post of total head teachers 3429 (633 Primary and 2796 Upper Primary) sanctioned under SSA have not yet been filled by the State. In addition, PTR at secondary level is 17 which is much lower than the RMSA norm of 30 and is also lower than the national average. However, according to the data shared by the MIS wing of department of school education Punjab shows a different story. 16,409 posts of teachers are

28 Amritsar, Barnala, Bathinda, Fazilka, Ferozepur, Ludhiana, Mansa, Moga, Patiala, Sangrur, Sri Muktsar Sahib, Taran 29 Malwa region of Punjab includes Barnala, Bathinda, Fazilka, Faridkot, Fatehgarh Sahib, Firozpur, Ludhiana, Mansa, Moga, Mohali, Muktsar, Pathankot, Patiala, Rupnagar, Sangrur

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vacant of which primary level vacant posts are 5,073 followed by senior secondary (4,135), upper primary 4,070 and secondary 3,132.

The border areas of India bordering Pakistan are more hostile than those bordering other countries. In order to check these problems, more number of security personnel had been continuously deployed. The people living in border areas have been facing socio- economic problems and psychological tensions. The paucity of teachers and absenteeism among the teachers is still a common characteristic of the education system of border areas.

It is proposed to recruit additional teachers (sanctioned posts) of across the primary, upper primary and senior secondary level to improve the PTR and meet the prescribed norms in all districts. For senior secondary level, it is proposed that a detailed study on requirement of subject wise teachers across blocks and districts should be undertaken before recruitment of additional teachers.

Further, there is a need to develop an incentive scheme which will aim to provide financial incentives and other necessary benefits to teachers providing service in border and remote areas school. The scheme can encourage teachers to get transfer and stay in border schools for long terms. The Department of School Education needs to identify block-wise number of schools. The scheme will help in higher enrolment, lower dropout and better- quality education in these areas at secondary level.

Additionally, the Government may consider suitable changes in service rules such as:

(a) Periodic transfer of principle/teachers (b) Making deployment of teachers mandatory in these regions in the first two years (c) Utilise sanctioned amount for in-service trainings for teachers (d) Regular recruitment of teachers (e) May consider the concept of territorial teachers’ limitation: for this, the state can be divided in different territories, either region-wise or district wise and teachers deployed in each territory will be required to serve in that region only except under exceptions.

4.4.2.6 Emphasis on Vocational Education GER and NER of boys at SS/SSS level has declined between FY 2012-13 and 2014-15 especially in border district. GER & NER is less than 10% of state average in border districts. Current statistic says that 12.36% dropout after class tenth and 8.83% between ninth and tenth in the state.30 There is urgent need to develop strategy to arrest this group. It is widely held that technical education can help enhance at-risk students' engagement in high school and reduce dropout. A strategy to reduce drop out must include as an important component, a strategy to ensure that all new entrants at the secondary level should have an option of vocational training education so that they can be well equipped with the knowledge and skill needed for different industries.

300 out of 600 state vocational training schools are not functional due to lack of adequate modern infra/ equipment. NSQF should be implemented in all state vocational training schools and all the available physical resources should be used. State vocational teacher should be provided training to as per the NSQF.

A Multi-dimensional approach is suggested as follows: a) Supply-side suggestions: o Set up new centers in the affected areas to begin with, & review the defunct VE schools o Leverage existing infra to build optimal delivery models (ITI premises, PSIDC space, industrial space during lean production hours etc.) (costing in subsequent slide) o Explore scheme-based training potential to address skilling needs of under privileged/BPL population; e.g. SGSY, Construction & Agriculture b) Demand-side suggestions:

30 State Report Card DISE, 2014-15

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o Build mechanisms (through school vigilance committees etc. & local networks including Student Youth Clubs) to identify & assist potential/ actual school dropouts & transition into VE programs (INR 2000 per month per student) o Include drug abuse related topics in school curriculum at appropriate age; rope in a celebrity as the brand ambassador for the anti-drug awareness campaign (akin to the 'Clean Campus - Safe Campus' campaign adopted in Kerala)

These may be considered after due deliberations within the Department.

4.4.3 MTEF projections – Reform scenario The various interventions proposed and costed above for the MTEF period during 2016-17 to 2018-19 are summarily presented in below Table 59.

The additional expenditure proposed to be incurred by the state for the suggested reforms over baseline/ trend scenario projections in the years 2016-17, 2017-18 and 2018-19 are INR 205 million, INR 198 million and INR 198 million respectively.

Table 59: Bottom-up Projections of Costed Reform Interventions in DSE (INR million)

S. Proposed Reform Intervention 2014-15 2015-16 2016-17 No. 1 Transport/Escort Facility for Students in Border Areas 151.8 154.1 154.1 Technology Intervention to Improve Transition and 53.5 43.5 43.5 2 Retention Rates A Additional Costed Reform Interventions (1+2) 205.3 197.6 197.6 B Baseline/ Trend MTEF Projections 81,679 92,122 104,056

It may be noted that the proposed scheme on “Transport/Escort Facility for students in Border Areas” is fully oriented towards girl students and hence 100% of its expenditure requirements would correspond to WCP component. 4.5 Reconciliation and Reprioritization

4.5.1 Reconciling expenditure requirements with resources It is necessary to reconcile ‘bottom-up’ expenditure requirements with ‘top-down’ estimation of resource availability for the department to assess their affordability. This has been presented in Table 60.

Table 60: Reconciliation of projected expenditure estimates with projected resources available to DSE for the period 2016-17 to 2018-19 (in INR million)

S. Head Table Ref. 2014-15 2015-16 2016-17 2017-18 2018-19 No. RE (P) (P) (P) (P) 1 Top-down budgeting: Departmental Table 35 70,430 71,578 77,138 82,893 89,270 Resource Ceiling 2 Bottom-up budgeting: Trend Scenario Table 37; Expenditure Requirements Table 39 70,950 79,515 90,749 102,893 116,909

3 Trend deficit (-)/ surplus (+) with respect (520) (7,937) (13,611) (20,000) (27,640) to resource availability (1-2) 4 Bottom-up budgeting: Costed Reform Table 59 - - 205 198 198 Interventions 5 MTEF deficit (-)/ surplus (+) before re- (520) (7,937) (13,816) (20,198) (27,837) prioritisation exercise (1-2-4)

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The projected resource envelope shows that it is not adequate to meet trend projection expenditure in all the three years. Moreover, expenditure projections for reform interventions are not affordable by the top-down projected resource growth.

4.5.2 Reprioritization In view of the constraining resource ceiling for reform interventions for all the years of MTEF, ways need to be explored either to release resources from baseline budget to finance the identified reform interventions and/ or to re-prioritize these reform interventions. For our purpose, those plan schemes have been examined where average utilization has been greater than 30% in 2012-13, 2013-14 and 2013-14RE versus budget estimates allocated. Based on this re-assessment, 25% of projected expenditure for those schemes under baseline budget in during 2016-18 can be directed towards meeting the reform interventions.

After doing the above-mentioned re-prioritization exercise, the excess of reform interventions, which remain unfunded, amount to INR 4,540 million, INR 9,230 million and INR 14,790 million in 2016-17, 2017-18 and 2018-19 respectively. It is recommended that the department actively explores other options of getting additional funding. It might also attempt to get additional funding from various sources, for e.g. Finance Commission Grants, SSA, RMSA, external aid, etc. It is recommended that the DSE submits to the Department of Finance this excess of its justified expenditure requirements as well during the annual budgeting exercise. Accordingly, the final MTEF projections after reconciling top-down and bottom-up budgeting is presented in Table 61 below.

Table 61: Final MTEF Projections of DSE (in INR million)

S. Head 2014-15 RE 2015-16 (P) 2016-17 (P) 2017-18 (P) 2018-19 (P) No. Top-down budgeting: 1 Departmental Resource 70,430 71,578 77,138 82,893 89,270 Envelope 2 Bottom-up budgeting 70,950 79,515 81,679 92,122 104,056 Bottom-up budgeting: Baseline 2.a) Scenario Expenditure 70,950 79,515 90,749 102,893 116,909 Requirements Of which, Women Component - 7,654 9,387 11,111 13,233 Plan (WCP) - Plus: Costed Additional 2.b) - - 205 198 198 Reform Interventions Of which, WCP - - - 152 154 154

Savings as per projecting on 2.c) - - 9,275 10,968 13,051 past utilization rates 3 MTEF deficit (-)/ surplus (+) (7,937) (4,541) (9,229) (14,786) Reconciled MTEF Projections 4 (after deliberations with 70,950 79,515 81,679 92,122 104,056 Department of Finance) 4.a) Reconciled Plan 4,551 17,244 11,994 14,139 16,786 Of which, WCP - 7,654 9,538 11,265 13,388

4.b) Reconciled Non-Plan 66,399 62,271 69,685 77,983 87,270

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5 MTEF for Public Works Department

This chapter presents the MTEF prepared for the Public Works Department (PWD), Govt. of Punjab for the FY2016-17, thus also containing forward estimates for FY2017-18 and FY2018-19. 5.1 Long-term sector strategy & departmental objectives

The MTEF has been prepared keeping in view the overall long-term strategies adopted by the GoP for the concerned sector i.e. Public Works, in its Five-Year Planning exercise and the vision of the department. The aim of the MTEF is to reinforce realisation of the long-term plans of the state government and objectives of the department through medium term interventions to be updated on a rolling basis. In this context, it may be useful to present an overview of the sector and the DPW.

5.1.1 Strategy for Transport Sector A break-up of the approved planned allocations for the transport sector is presented in below table.

Table 62: Allocation under the transport sector out of total allocated funds under FYP (in INR million)

Allocated for % Allocation for FYP Total outlay Transport Sector Transport Sector

10th FYP (2002-07) 186,570 27,110 14.53% 11th FYP (2007-12) 289,230 42,900 14.93% 12th FYP (draft projections, 2012-17) 921,000 86,320 9.38% Source: Draft 12th FYP, 11th and 10th Five-Year Plans, GoP

Further, it is clear from below table that majority of the allocation under the transport sector is for Roads and Bridges and Punjab Infrastructure Development Board (PIDB). However, from 2011-12 to 2016-17, while the allocation of funds under Roads and Bridges decreased from about 38% to about 23%, the outlay under PIDB increased from about 58% to slightly over 73%.

Table 63: Allocation of funds (approved outlay under Annual Plan) under the Transport Sector since 2011-12

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Road Transport 1.19% 0.96% 0.89% 0.94% 0.00% 2.49% Roads and Bridges 38.77% 25.02% 23.14% 38.65% 46.85% 23.13% Civil Aviation 1.53% 0.55% 2.08% 0.49% 0.43% 0.00% PIDB 58.51% 73.48% 73.90% 59.93% 52.72% 73.93% Source: Annual Plans, GoP

Further, as can be seen from below, from 2010-11 to 2014-15, the rate of utilisation of allocated funds has declined from 616% to 92% in Civil Aviation and from 99% to 93% in Roads and Bridges. The utilization rate for Road Transport has also been extremely low in this period.

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Table 64: Utilization of allocated funds under Annual Plans

Transport 2010-11 2011-12 2012-13 2013-14 2014-15 Road Transport 71% 118% 0% 0% 100% Roads and Bridges 99% 64% 49% 75% 93% Civil Aviation 616% 21% 499% 0% 92% PIDB 123% 132% 52% 100% 133% Source: Annual Plans, GoP

5.1.2 Objectives of DPW The Department of Public Works (Buildings and Roads) is a premier agency of the state government for planning, developing, designing, construction, operation, upgradation and maintenance of roads, buildings and bridges in the state. The department also acts as the technical advisor to the state government in all aspects of construction activity. From its inception in 1854, DPW (B&R) has been endeavouring to provide technical lead to other departments of the state government by introducing latest construction techniques and materials, so as to achieve higher standards. DPW (B&R) has been maintaining material database and has standardized the specifications, common schedule of rates, confidential analysis etc. for adoption by all other departments, boards and corporations of the state government.

The Punjab Roads & Bridges Development Board (PRBDB) was constituted by the Government of Punjab in 1998 as an undertaking of the state government to act as a catalyst for infrastructure development in the road sector in the state of Punjab. Its purpose is to act as a nodal agency to plan and monitor all aspects relating to construction and improvement of roads and bridges in the state. This Board is responsible for planning and deployment of funds on state roads, fiscal management, project management, interdepartmental coordination and other key areas.

For efficient operations, DPW is organized into headquarters office and field units at various levels. The Chief Engineer is the head of the department and all officials of the department work under his overall supervision unless specifically provided by the state government in the administrative department. Engineering officers down the line are Superintending Engineers, Executive Engineers, Sub-Divisional Engineers/ Assistant Engineers, and Junior Engineers/ Extra Assistant Engineers. They may be posted in the Headquarters or in the field units. There are other officials at various levels in matters relating to planning and designing, estimation, tendering and allotment of works, administration, accounts, legal, information, vigilance, regulations, testing, research, land acquisition etc. Besides, there is supporting staff in all offices, and skilled personnel of various categories for execution and supervision of site works. The administrative unit and supervisory field unit of the department is the “Circle”, under the charge of a Superintending Engineer.

In order to ensure timely and effective completion of its works, DPW has evolved a specific set up in which the different wings of the department, the Public Health Wing and the Architecture Wing, work together. The control of the operations of these wings vests in the Government of Punjab and at the government level, this control is exercised by the Public Works minister who is assisted by the Principal Secretary to the Government of Punjab. At the field level, the Punjab DPW (B&R) is headed by the Chief Engineers who look after various disciplines such as link roads & buildings, National Highways, planning, design, electrical & mechanical wings, and gazetted & non-gazetted establishment. There is also a Chief Vigilance Officer. To conduct research and development work and testing of materials, DPW (B&R) has an engineering research laboratory in Patiala.

Figure 3: Organogram of Department of Public Works, Government of Punjab

Department of Public Works (Building and Roads)

Buildings Roads

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The service delivery mechanism for various services under the purview of this department has been shown in the table below:

Table 65: Service Delivery Mechanism for the DPW

Services Category Delivery mechanism . National The construction of NH is undertaken by the DPW (B&R), the NHAI (for road Highways projects under the NHDP) and the Municipal Corporation, out of the funds (NH) provided by the Central Government and the Ministry of Shipping, Road Transport and Highways. . State The DPW (B&R) undertakes the construction of SH, MDRs and ODRs with the Highways funds arranged from PIDB, centrally sponsored schemes, Central Roads Fund (SH) (CRF) and Inter State Connectivity & Economic Importance Scheme (ISC&EI), . District & World Bank loan schemes, schemes under PMGSY etc. The DPW (B&R) also Other Roads undertakes the construction of Village Link Roads with the help of funds provided by the Punjab Mandi Board. . Bridges/ The construction of bridges and ROBs is carried out by the D PW (B&R) out of Railway Over loans arranged from HUDCO, NABARAD, Bond Schemes and PIDB funds. bridges . Buildings The DPW (B&R) undertakes the construction of government buildings for multifarious departments of the GoP out of funds administered by the

Construction respective departments. . National The NH are maintained by the DPW (B&R), the NHAI (for road projects under Highways the NHDP) and the Municipal Corporation, out of the funds provided by the (NH) Central Government and the Ministry of Shipping, Road Transport and Highways. . State The DPW (B&R) undertakes the maintenance and improvement of SH, MDRs Highways and ODRs with the funds arranged from centrally sponsored schemes, CRF (SH) and ISC&EI, World Bank loan schemes, schemes under PMGSY etc. . District & The DPW (B&R) also undertakes the maintenance of Village Link Roads with Other Roads the help of funds provided by the Punjab Mandi Board. . Bridges/ The maintenance of bridges and ROBs is carried out by the DPW (B&R) out of Railway Over loans arranged from HUDCO, NABARAD, Bond Schemes and PIDB funds. bridges . Buildings The DPW (B&R) undertakes the maintenance of government buildings for multifarious departments of the GoP for which the Department of Finance

Maintenance releases funds every year. . Roads & The Chief Engineers & Superintending Engineers in the DPW (B&R) are in Buildings charge of survey of roads, bridges and buildings within their territorial . Buildings jurisdiction.

Survey . Buildings The DPW (B&R) is responsible for inspecting buildings/ structures to ensure that they are not unsafe for use.

Safet y . Roads/ To conduct research and development work and testing of materials, the DPW Buildings (B&R) has an Engineering Research Laboratory in Patiala. The Chief Engineers & Superintending Engineers are in charge of quality control within their territorial jurisdiction.

Quality Standard s

Realising the importance of roads in economic development, the Government of Punjab along with the DPW (B&R) has initiated several schemes to develop a strong network of roads in the state. On June 1, 2015, the Punjab government approved reconstruction and repair of 5490 km of state highways and arterial roads, which is to be completed within one year. Work on the Jalandhar-Barnala four-laning highway project is also going to commence soon. The government has started the process of six-laning of the Chandigarh-Ludhiana road. The EPC contract for the four-laning with paved side shoulders of Tapa to Bhatinda section of NH-64 in Punjab has

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been awarded to a private firm. In the 12th Five-Year Plan, an outlay of INR 200 million has been proposed for the renovation/upgradation of Government Technical Institutes.

As is observable, the state government has already initiated a few projects, and in due course of time, will be able to achieve its mandate. 5.2 Top-Down Budgeting- Estimation of Resource Envelope

Estimating ‘Resource Envelope’ involves projecting the likely availability of resources in the future within which the department is expected to fit in its expenditures has already been discussed in section 2.2.1. The analysis and results are discussed here for the PDW.

5.2.1 Step I: Fiscal Policy Resource Ceiling for State Total Expenditure Projections for all three sources of government receipts viz. (1) revenue receipts, (2) non-debt capital receipts and (3) fiscal deficit (net of debt receipts) have been taken from MTFF.

Table 66: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (in INR million)

2014-15 2015-16 2016-17 2017-18 2018-19 S. No. Item Basis expected* expected* (P)** (P) (P) 1 Total Revenue Receipts 390,230 MTFF 456,480 494,084 535,190 580,154 2 Non-debt Capital Receipts 1,184 MTFF 1,248 1,311 1,376 1,445 Fiscal Deficit (Net Debt 3 109,165 MTFF 121,077 128,835 124,834 128,633 Receipts) Fiscal Policy Resource 4 Ceiling for State Total 500,579 578,806 624,230 661,401 710,232 Expenditure (1 + 2 + 3) * Base year for MTFF projections is expected estimated for FY 2015-16 (data as provided by the Department of Finance, Govt. of Punjab) for all except for two revenue items of: (a) state lottery, (b) recovery of loans & advances, and three expenditure items of: (c) salary, (d) pension and (e) loans and advances given by State Government for which the base year is expected estimates for FY 2014-15. ** P within brackets, i.e. (P) in this report denotes the projections made

5.2.2 Step II: Sectoral State Plan Resource Ceiling Resource Ceiling for State Plan in the concerned Transport Sector has been arrived at in the following way31:

5. Resource ceiling for ‘Total Plan’ expenditure in the state is estimated for MTEF projections period, FY 2016-19 by extrapolating the historical share of 22.61% of total plan expenditure sourced from State’s Annual Plan in the values of S.No.4 of above table.

31 Ideally, average historical share for at least 3 years should be considered to take care of any outliers/ spikes. However, due to unavailability of detailed data from Annual Plans of the State, the historical share has been considered for only one year 2014-15 expected in this exercise. * Base year for MTFF projections is expected estimated for FY 2015-16 (data as provided by the Finance Department, Govt. of Punjab) for all except for two revenue items of: (a) state lottery, (b) recovery of loans & advances, and three expenditure items of: (c) salary, (d) pension and (e) loans and advances given by State Government for which the base year is expected estimates for FY 2014-15.

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6. Resource ceiling for Transport Sub-Sector in Total Plan expenditure resource ceiling during 2016-19 is estimated by extrapolating its historical share of 9.38% of 12th five-year program (2012-17) in the projected figure in S. No. 6.

Table 67: Estimation of Resource Ceiling for State Plan in Transport (in INR million)

2014-15 S. No. Item Basis 2015-16 2016-17 2017-18 2018-19 (Annual Plan, AP) Affordable Resource Envelope Historical 5 for State Plan Expenditure 113,180 share (AP)- 130,867 141,137 149,542 160,582 (proportion of 4) 22.61% Affordable Resource Envelope Historical 6 for Transport Sector 10,340 share (AP)- 12,270 13,233 14,021 15,056 (proportion of 5) 9.38%

5.2.3 Step III: Departmental MTEF Plan Budget Resource Ceiling 7. Projections for State plan schemes in DPW is estimated during FY 2016-18 by extrapolating its historical share (2014-15 RE) of 67.70% in the values of affordable resource envelope for Transport sector as calculated in S.No.6 above.

8. Resource availability from center (CS+CSS) for DPW is then extrapolated on its historical share of 35.20% (2014-15 RE) (proportion of 6).

9. Non-plan resource ceiling for the department is projected based on the historical trend growth of budget estimates for non-plan expenditure for the period 2012-13 to 2014-15 (RE).

Total resource ceiling for the department is then calculated by summing up the estimated resource availability of the department for state plan schemes (7), Resource availability from center (CS/CSS) (8) and non-plan expenditure (9).

The total likely resource availability for DPW for the next three years is presented in Table 68.

Table 68: Estimation of MTEF Budget Resource Ceiling for DPW (in INR million)

S. 2014-15 2015-16 2016-17 2017-18 2018-19 Item 2013-14 Basis No. (RE) expected* (P) (P) (P)

Historical Affordable RE for State Plan share in 7 Expenditure for DPW 2,020 7,000 8,306 8,958 9,492 10,192 2014-15: (proportion of 6) 67.70% Historical Projected Resource share in 8 Availability from Center for 480 3,640 4,319 4,658 4,936 5,300 2014-15: DPW (CS/CSS) 35.20% Projected Non Plan 9 3,309 4,090 13.11% 4,626 5,232 5,918 6,694 Expenditure MTEF Resource 10 Envelope for DPW 5,809 14,730 17,252 18,849 20,346 22,186

(7+8+9)

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5.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario

The first step under bottom-up budgeting is estimating the expenditure requirements of the DPW based on the trend observed in the past years. Expenditure projections based on trend indicates the expenditure requirement that need to be incurred for continuation of the current schemes and sustain current level of performance indicators in service delivery at the historical rate.

5.3.1 Basis used for projections Trend scenario projections for the schemes under DPW for the next three-year period, i.e. FY 2016-17 to FY 2018-19 using 2014-15 (RE) as the base year have been done as follows:

5.3.1.1 Schemes assumed to be in continuum, projected at object head level Trend scenario projections for the schemes under DPW for the next three years, i.e. 2016-17 to 2018-19 using 2014-15 (RE) as the base year have been done as follows:

Schemes assumed to be in continuum, projected at detailed expenditure head level  Salaries & Wages (detailed expenditure heads- 01 & 02): Projections for salaries and wages have been done in accordance with the state’s average annual growth in salaries over a period of 12 years. The average growth rate comes out to be 12%.

 ‘Minor Works/ Maintenance’ and ‘Maintenance’ expenditure10 (detailed expenditure heads- 27): For the projection purpose, Trend growth rates for these detailed heads taken together during the past period from 2012-13 (Actual) till 2014-15 (RE) is coming out to be 4% p.a. The same has been used for projecting annual expenditure requirements under the trend scenario for the MTEF period 2016-19.  Major Works/ Land & Building (detailed expenditure head- 53): Projections for the period 2016-19 have been made based on Rule of Thumb Growth rate observed under this head from 2010-15. Trend growth rate of allocations under this detailed expenditure head for DPW is 15 p.a. and 10% p.a. respectively

All other Detailed Heads:  Except for above, all other detailed heads under each scheme have been projected based on their own historical trend growth rates observed during 2010-11 to 2014-15 (RE).  In cases where the trend growth rate is found to be negative or erratic or too high/ low, the projections have been made based on the trend growth rates observed in the expenditure category of the department to which they belong, i.e. plan or non-plan. In certain cases, rule of thumb rate of growth is assumed, which is 10%.

Table 69: Detailed expenditure heads for which inflation is used as a basis for trend projections

Detailed Head Detailed Head Description Description Code Code 24 P.O.L 94 Water Charges 93 Electricity Charges 13 Office Expenses 11 Travel expenses 91 Medical Reimbursements 50 Other Charges 92 Telephones 14 Rent Rates and Taxes

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5.3.2 Expenditure Projections under Trend Scenario Table 70 present the MTEF projections of DPW for the next three years using the basis and assumptions specified in previous section 5.3.1. The projections done at detailed expenditure head level have been consolidated and presented at scheme level in below table.

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Table 70: MTEF projections- Trend Scenario for DPW (in INR million)

Sub Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Major Minor Budget Major SOE Head Head Type (RE) (BE) (Proj) (Proj) (Proj) (Proj) Head Electrical Operational Works, Other 2059 60 53-101 2 NP 109.5 - 122.6 137.4 153.8 172.3 Administrative Services 2059 60 53 Electrical Operational Works 24 NP 6.9 - 7.2 7.6 8.0 8.4 Industrial Training (50:50) (1) Public work Department-87% (11) Public 2059 60 53-101 27 NP 460.0 - 478.4 497.5 517.4 538.1 Health Department - 13%, Other Administrative Services 2059 60 53 Electrical Operational Works 93 NP 50.0 - 52.6 55.4 58.3 61.4 2059 60 53 Electrical Operational Works 94 NP 5.6 - 5.9 6.2 6.5 6.9 2059 80 1 Direction, Architecture 1 NP 3,318.0 3,675.0 3,716.2 4,162.1 4,661.6 5,220.9 2059 80 1 Direction, Architecture 11 NP 2.3 2.9 2.4 2.5 2.7 2.8 2059 80 1 Direction, Architecture 13 NP 22.0 21.3 23.2 24.4 25.7 27.0 2059 80 1 Direction, Architecture 14 NP 28.2 27.3 29.7 31.2 32.9 34.6 2059 80 1 Direction, Architecture 24 NP 40.5 40.4 42.6 44.8 47.2 49.6 2059 80 1 Direction 50 NP 2.5 2.5 2.6 2.8 2.9 3.1 2059 80 1 Direction, Architecture 91 NP 38.5 41.0 40.5 42.6 44.9 47.2 2059 80 1 Direction, Architecture 92 NP 3.5 4.5 3.7 3.9 4.1 4.3 2059 80 1 Direction, Architecture 93 NP 8.4 8.6 8.9 9.3 9.8 10.3 2059 80 1 Direction, Architecture 94 NP 2.1 2.5 2.2 2.3 2.4 2.5 3054 1 337 National Highways 27 NP - - - 51.9 54.0 56.1 3054 3 337 State Highways 27 NP - 1,500.0 - 1,560.0 1,622.4 1,687.3 (a)State Share for upgradation of Roads 5054 3 101 under PMGSY (b) Forest Clearance and 53 SP 105.0 0.1 115.5 127.1 139.8 153.7 utility shifting (a)State Share for upgradation of Roads 5054 3 789 under PMGSY (b) Forest Clearance and 53 SP 5.0 - 5.5 6.1 6.7 7.3 utility shifting 5054 3 337 11 Rural Roads & 9 Bridges (XV) 53 SP - 30.0 - 33.0 36.3 39.9 20 Rural Roads and 18 Bridges 5054 3 337 53 SP - 15.0 - 16.5 18.2 20.0 Projects (XIII) 5054 3 337 38 rural roads & 1 Bridge in 15 Districts 53 SP 15.0 60.0 16.5 18.2 20.0 22.0

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Sub Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Major Minor Budget Major SOE Head Head Type (RE) (BE) (Proj) (Proj) (Proj) (Proj) Head (XVI) 5 Rural Roads & 1 Bridge in 3 Districts 5054 3 337 53 SP 60.0 65.0 66.0 72.6 79.9 87.8 of Punjab (XVI-ii) 55 Rural Roads & 2 Bridges in Taran 5054 3 337 53 SP 25.0 26.0 27.5 30.3 33.3 36.6 District (XVI-i) 5054 3 337 59 Rural Roads & 1 Bridge Project (XIV) 53 SP - 0.1 - 0.1 0.1 0.1 6 Rural Roads and 2 Bridges Projects 5054 3 337 53 SP - 0.1 - 0.1 0.1 0.1 (XII(i)) 5054 3 337 66 Rural Roads and 10 Bridges (XIV(ii)) 53 SP - 3.1 - 3.4 3.7 4.1 5054 3 337 7 Rural Roads (XVII) 53 SP 150.0 320.0 165.0 181.5 199.7 219.6 74 Rural Roads and 15 Bridges Projects 5054 3 337 53 SP - 0.8 - 0.9 1.0 1.1 (XII) Improvement & widening of existing 5054 3 101 53 SP 96.0 0.1 105.6 116.2 127.8 140.6 roads Land acquisition for identified 5054 3 101 53 SP - 0.1 - 0.1 0.1 0.1 Corridors (PMGSY) Proposed Rural road and Bridges 5054 3 337 53 SP 600.0 480.0 660.0 726.0 798.6 878.5 Project (101 Rural Roads) RIDF-(XIX) Setting up of Composite Building at 4059 80 51 Mohali for all the Commission and 53 SP - 0.1 - 0.1 0.1 0.1 Tribunals of the State 5054 3 337 Special Repair of Plan Roads 53 SP - 1,425.0 - 1,567.5 1,724.3 1,896.7 5054 3 789 Special Repair of Plan Roads 53 SP - 75.0 - 82.5 90.8 99.8 Upgradation/Strengthening of Rural 5054 3 337 Roads (To be financed out of RDF 53 SP - 2,850.0 - 3,135.0 3,448.5 3,793.4 funds) Upgradation/Strengthening of Rural 5054 3 789 Roads (To be financed out of RDF 53 SP - 150.0 - 165.0 181.5 199.7 funds) World Bank Scheme for Road 5054 3 101 53 SP 950.0 950.0 1,045.0 1,149.5 1,264.5 1,390.9 Infrastructure (WB:State) (75:25) World Bank Scheme for Road 5054 3 789 53 SP - 50.0 - 55.0 60.5 66.6 Infrastructure (WB:State) (75:25)

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Sub Scheme Name 2014-15 2015-16 2015-16 2016-17 2017-18 2018-19 Major Minor Budget Major SOE Head Head Type (RE) (BE) (Proj) (Proj) (Proj) (Proj) Head Pradhan Mantri Gramin Sadak Yojana 5054 4 337 53 CSS - - - 0.1 0.1 0.1 (PMGSY - II) - 75:26 5054 3 789 Central Road Fund (CRF) 53 CS - 35.0 - 38.5 42.4 46.6 5054 3 800 Central Road Fund (CRF) 53 CS 628.6 664.9 691.5 760.6 836.7 920.3 Pradhan Mantri Gram Sadak Yojana 5054 4 337 53 CS 3,020.0 2,869.0 3,322.0 3,654.2 4,019.6 44,16 (PMGSY-1)-100% Pradhan Mantri Gram Sadak Yojana 5054 4 789 53 CS - 151.0 - 166.1 182.7 201.0 (PMGSY-1)-100%

5.3.2.1 Summary of Bottom-Up - Trend Scenario MTEF projections Following are the key observations made from the trend scenarios projections of MTEF for DPW:

 Total Directorate expenditure is projected to increase from INR 15,550 million in 2015-16 BE to INR 18,750 million in 2016-17.

 Non Plan (NP) expenditure has been projected to increase by 5 % annually.

 Cumulative growth in State Plan expenditure (SP) is projected to be 18% in 2016-17 as compared to 2015-16 BE figures

 Going by trend projections, an increase in share of State Plan and Non-Plan expenditure from 18% and 25% in 2016-17 has been projected.

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5.4 Bottom-Up Budgeting- Costed Reform Interventions

As discussed in section 2.2.2.2, after estimating the baseline budget, the second part of bottom-up budgeting involves: (i) Identification of issues and gaps in service delivery; and (ii) Suggesting reform interventions and estimating the associated cost implications.

5.4.1 Identification of issues and gaps in service delivery 5.4.1.1 Preparation of logical framework at scheme level To begin with, ‘Scheme Outputs’ are specified/ defined for all schemes that are presently running under the DPW and are expected to continue during 2016-17. These outputs are then mapped to the concerned ‘Objective of the department’ to which they contribute achieving. Results of achievement of departmental objectives have been termed as ‘departmental outcome’.

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Table 71: Log frame and Performance Indicators for select schemes presently running under Public Work (Roads) Directorate

SM Departmental Departmental MH MH SH PL Scheme Name Scheme Output PI for scheme output H Objective Objective(Outcome) 5054 3 800 10 Upgradation of State % reduction in travel time between Development of Amount utilised as a % of Highways and places; Savings in cost (fuels/ tyres etc.) CS Central Road Fund 5054 3 789 2 Roads target set construction of major due to speedy movement of vehicles on bridges on river Sutluj the concerned routes 5054 3 337 4 Increase in length of Provide the Road rural roads per 100 sq. Core Networking 25330 Pradhan Mantri Gram Connectivity with in km of rural area; % % reduction in travel time; Savings in CS length of Rural through Sadak Yojana a Population of more increase in population cost due to speedy accessibility 5054 3 789 4 routes & rural link routes than 5000 Persons connected with rural roads 5054 3 101 8 Upgradation, Improving Road Rehabilitation and Reduction in travel time between World Bank Scheme for Increase in length of SH Connectivity and SP Periodic places; Savings in cost due to speedy Road Infrastructure per 100 sq. km. of area Maintenance of the roads 5054 3 789 6 Maintenance of movement of vehicles MDR, ODR Roads 5054 4 337 7 Increase in length of rural roads per 100 sq. Upgradation/Strengthening Reduction in travel time between Widening/Strengthe km of rural area; % Upgradation of Rural SP of Rural Roads (To be places; Savings in cost due to speedy ning of Rural Roads increase in population Roads 5054 4 789 7 financed out of RDF funds) movement of vehicles connected with rural roads % increase in % reduction in road transport time; % 5054 3 337 47 Maintenance and Special Repair of Plan maintenance expenditure Urgent Repair of Roads reduction in commercial transportation SP Repairs of SH, MDR Roads on SH, MDR & other and Traffic Worthy operating costs or reduction in average 5054 3 789 10 and Other Roads DPW roads road user cost 5054 3 800 12 NABARD Assisted Projects. Increase in length of Construction/widening of rural roads per 100 sq. To promote Improving Road and % reduction in travel time between roads and construction of km of rural area; % SP construction of Rural Bridges Connectivity in places; Savings in cost due to speedy bridges and Infrastructure- increase in population 5054 3 789 2 Roads and Bridges Rural Areas movement of vehicles RIDF-(XII-XIX) (80:20) connected with rural (Outlay- INR 1000 million) roads 3 % amount utilised of NH Improving road Increase in length of NH per 100 sq. 3054 337 2 NP State Highways Construction of SH 3 funds connectivity in the state km. of area

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5.4.1.2 Assess performance and gap Three types of analysis on physical indicators have been done: (a) Inter-State; (b) Intra-State; and (c) Assessment on own trend performance.

A. Inter-State Comparative Assessment This sub-section presents a comparative assessment of the current status of PIs of Punjab vis-a-vis selected other progressive states and average at all India level. Due to data availability constraints on all the PIs at output/ outcome level, the assessment has been done for only those PIs for which data was available in public domain. However, it is advised to collect data on all output level and outcome level PIs so that detailed scheme- level and department level assessment can be done in order to identify issues being faced in their implementation.

Table 72 presented subsequently provides a comparative assessment of select PIs (subject to data availability) in the roads sector in Punjab viz-a-viz the national average and some other progressive states. The main observations are as follows:

 Area based road density (road length per 100 sq. km of area): Road length per 100 sq. km of area in the state at 186.39 km is a little higher than the national average of 149.53 km. It is also higher than that of other states such as Haryana, Madhya Pradesh, Uttar Pradesh, Rajasthan and Bihar, but is significantly lower than that of Kerala, which has a road density of 554.35 km per 100 sq. km of area.

 Area based density of National Highways (NH): The length of NH per 100 sq. km of area in Punjab is around 3.09 km, which is slightly less than the national average of 3.15 km. Punjab lags behind Haryana, Kerala, Uttar Pradesh and Bihar in terms of the density of NH.

 Area based urban road density: The urban road density in Punjab is 53.06 km per one hundred thousand of population, which is much higher than the national average of 30.32, but significantly lower than that of West Bengal (118.6 km per one hundred thousand of population).

 Population based road density (road length per one hundred thousand of population): Road length per one hundred thousand population in Punjab is 338.84 km which is lower than the national average of 540.9 km. However, the population-based road density of Odisha and Kerala is almost double that of Punjab.

 Lower surfaced area: Punjab surpasses many states in terms of the quality of roads. This is evident from the fact that the percentage of total roads in Punjab which is surfaced, is 89%, second only to Haryana where 91% of the roads are surfaced.

 Road accidents: The number of road accidents per 10000 km of road in Punjab is around 675.5, which is much lower than the national average of 1154.23, but significantly higher than the number in Odisha (364.5).

 State Highways (SH): SH constitute only 1.57 % of the total road inventory in Punjab as against a national average of 4.4%. Since SH and district roads constitute the secondary system of road network in the country, major development is required in construction and maintenance of these roads in the state.

Table 72: Status of Roads in Punjab vis-a-vis national average and other progressive states (2011-12)

Best National Indicator Punjab Haryana Rajasthan UP Bihar MP Kerala Performi Average/ ng Total Road length per 100 sq. km of Kerala 186.39 96.44 72.64 167.31 147.1 65.29 554.35 149.53 area (in km) (554.35) Road length per one hundred 338.84 168.18 362.29 201.97 133.44 277.23 645.26 Kerala 540.9 thousand of population (in (645.26)

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Best National Indicator Punjab Haryana Rajasthan UP Bihar MP Kerala Performi Average/ ng Total km) NH per 100 sq. km of area (in Bihar 3.09 3.69 2.08 3.24 4.36 1.64 3.75 3.15 km) (4.36) NH per one hundred Rajasthan 5.62 6.44 10.39 3.92 3.95 6.98 4.36 20.28 thousand of population (in (10.39) km) Surfaced Length as a % of Haryana 89% 91% 81% 77% 47% 64% 57% 66% Total Road Length (91%) Jharkhan Share of NH in Total Roads 1.66% 3.83% 2.87% 1.94% 2.96% 2.52% 0.68% 3.47% d (8.26%) Gujarat Share of SH in Total Roads 1.57% 5.91% 4.55% 1.97% 3.51% 5.09% 2.01% 4.40% (11.29%) Urban Road Density (Urban West Roads per one hundred 53.06 41.38 18.36 38.68 8.59 20.07 56.67 Bengal 30.32 thousand of population) (118.6) Odisha Road accidents per Length 675.5 2360.6 923.9 743.5 745 2544.5 1679.1 1154.23 (364.5) Number of road accidents per Punjab 10.1 16.8 25.6 19.4 33.2 62.9 52.5 31.62 10000 vehicles (10.1) Source: Basic Road Statistics of India 2011-12 published by MoRTH

Table 73: Status of Roads in Punjab vis-a-vis national average and other progressive states (2012-13)

Sl Madhya National Indicator Punjab Haryana Rajasthan Gujarat No. Pradesh Average

Area based road density (road length in kms per 100 sq. km. of area) 1 State Highways 2.93 5.46 3.06 9.44 3.55 5.15 2 Other DPW Roads 14.08 52.06 23.82 28.97 15.93 32.45 Population based road density (road length in kms per 100,000 of population) 3 State Highways 5.33 9.53 15.25 30.65 15.06 13.98 4 Other DPW Roads 25.6 90.79 118.82 94.05 67.65 88.15 Source: Basic Road Statistics of India, 2012-13, published by MoRTH

 Area based road density (road length per 100 sq. km of area): Area based road density of state highways per 100 sq. km of area in the state at 2.93 km is a less than the national average of 5.15 km. It is lesser than the Haryana, Madhya Pradesh, Rajasthan and Gujrat. Other DPW road in the state at 14.08 is a less than the national average 32.45 Km.

 Population based road density (road length per one hundred thousand of population): Population based road density of state highways per one hundred thousand of population in the state at 5.33 km is a less than the national average of 13.98 km. It is lesser than the Haryana, Madhya Pradesh, Rajasthan and Gujrat. Other DPW roads in the state at 25.60 is a less than the national average 88.15 Km.

B. Intra -State Comparative Assessment Earlier sections have dealt with the state’s performance with respect to other states and all India average and certain important indicators performance over the years. However, the different parts of the state are not at the same levels in all dimensions, given its geographical and political variance. The central districts or districts near Chandigarh or Haryana have different considerations than the districts near boarder areas (Jammu region). This section would highlight the district wise performance on certain important indicators, which would help the department to concentrate on the concerned areas in efficient manner.

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Table 74:Intra-State comparison of road density in FY2013-14

District Area based road density Population based road Vehicle density (No. of (roads in kms per 100 sq. density (roads in kms per registered vehicles per km of area) one hundred thousands of km of metallic road) population) Amritsar 149 151 231 Barnala 133 303 32 Bathinda 117 272 82 Faridkot 132 298 119 Fazilka - - 12 Ferozepur 54 136 100 F.G.Sahib 183 349 68 Gurdaspur 121 182 84 Hoshiarpur 171 355 70 Jalandhar 221 258 178 Kapurthala 153 297 96 Ludhiana 268 278 153 Mansa 126 344 33 Moga 146 317 44 Mohali (SAS.N) 229 234 58 S. Mukatsar. S 161 447 23 Nawanshahar (SBS Nagar) 201 408 52 Pathankot - - 27 Patiala 149 240 126 Ropar/ Rupnagar 193 377 89 Sangrur 151 318 61 Tarn Taran 127 265 36

Table 75: Intra-State comparison of road density in FY2013-14

District 2000-01 2013-14(P) CAGR Amritsar 4769 3932

Tarn Taran (2006) 3122

Sub-Total 4769 7054 3.32% Ferozepur 4162 2889

Fazilka (2011) 3309

Sub-total 4162 6198 3.37% Gurdaspur 3706 4308

Pathankot (2011) 1637

Sub-Total 3706 5945 4.02% Sangrur 4806 5448

Barnala (2011) 1873

Sub-Total 4806 7321 3.57% Patiala 4305 4788

Ropar/ Rupnagar 3276 2638

Mohali (SAS.N) (2006) 2508

Sub-Total 7581 9934 2.28%

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District 2000-01 2013-14(P) CAGR Bathinda 2594 3966 3.60% Faridkot 1354 1933 3.01% F.G.Sahib 1594 2164 2.58% Hoshiarpur 3846 5741 3.39% Jalandhar 4377 5816 2.40% Kapurthala 1739 2490 3.04% Ludhiana 6007 10100 4.43% Mansa 1837 2734 3.37% Moga 2178 3240 3.37% Nawanshahar (SBS Nagar) 1934 2543 2.31% S. Mukatsar. S 2352 4223 5.00% Source: Punjab at a Glance-2014

As can be seen from above tables,

 Area based road density (road length per 100 sq. km of area): Road length per 100 sq. km of area in some districts, namely Bathinda, Ferozepur, Gurdaspur, Mansa, Tarn Taran is significantly lower than the Ludhiana, Jalandhar, Mohali.

 Population based road density (road length per one hundred thousand of population): Population based road density in some districts, viz. Amritsar, Ferozepur, Gurdaspur, Mohali, Patiala is significantly lower than in Muktsar, Nawanshahr, Ropar.

 Vehicle Density (No. of registered vehicles per km of metallic road): In some districts, registered vehicles are very less as compared to other districts. Amritsar, Faridkot, Jalandhar, Ludhiana, Patiala have this density significantly higher than the Mansa, Nawanshahar and Barnala.

C. Assessment on own trend performance Below is an analysis of the State on trend on PIs in the past years along with similar analysis on its own expenditure has been presented.

i. Status of and trend in performance indicators Table 76 presents the status and trend of key performance indicators for road sector in Punjab in the past six years (2007-08 to 2012-13).

Table 76: Past trend in performance indicators under Road sector (all figures in Km)

Trend Growth PI at Outcome level 2007-08 2008-09 2009-10 20010-11 2011-12 2012-13 (For 6 Year)

Total Road Length 45178 77912 81899 84193 93871 98442 19%

Surfaced Road Length 37487 70330 74319 76612 83717 87581 22%

Length of NH 1557 1557 1557 1557 1557 1557 0%

By category of NH:

Single/ Intermediate 46 10 0 0 0 0 -65% Lane Length

Two- Lane 1221 1179 1091 958 891 891 -6%

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Trend Growth PI at Outcome level 2007-08 2008-09 2009-10 20010-11 2011-12 2012-13 (For 6 Year)

Four Lane & above 290 368 466 599 666 666 20%

Length of SH 1393 1477 1477 1477 1477 1477 1% Surfaced SH 1393 1477 1477 1477 1477 1477 0%

By category of SH

BSSL 0 0 0 0 0 0 0% SSL 567 305 305 305 207 166 -20% SDL 694 1135 1135 1135 1135 1176 13% SML 132 37 37 36 135 135 40% Other DPW Roads Total 27276 5837 6145 6783 6827 7091 -12% Surfaced 27166 5837 6145 6783 6827 7091 -12% Source: Basic Road Statistics of India published by MORTH, various years

As can be seen from Table 76, from 2007-08 to 2012-13, the growth rate of the total road length in Punjab was 19%. In 2008, there was a marked 72% increase in the total road length.

5.4.1.3 Scheme and Institutional Reviews

Based on the study of select key schemes and institutional structure in terms of its processes, below issues are identified in the functioning of the department:

1. Limiting costs and time overruns: A typical infrastructure project goes through the following stages, i.e. planning, approval, awarding of contract, construction and post-construction monitoring. In the beginning of the project, the department prepares an estimate of time and cost needed to complete the project. However, it has been observed that cost and time overruns in the department constitute one of the major issues impeding its smooth functioning. Our discussions with departmental officials and our study of sample project files indicate the following key reasons for cost and time overruns:

a. Legal issues: The department faces several legal issues especially regarding the process of land acquisition. Apart from land acquisition, there are delays in obtaining multiple clearances under various Acts and Rules.

b. Inadequate details in project reports: Another major reason for time and cost overruns is that DPRs often miss out on important information, which can have legal and/or financial implications.

c. Delay in financial allocation: There are delays in financial allocation due to several reasons. This leads to an increase in the cost of raw materials, which at times makes the project unviable.

d. Delay in official clearances: Delay in receiving the Environment and/or Forest clearance and clearances from various other departments.

e. Delayed shifting of utility services: In several projects, after the contract is awarded, there is delay on the part of the contractor in shifting of utility services, which is another reason that causes a delay in the project.

To minimize occurrences of the foregoing impediments, the following solutions may be considered:

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Performance Appraisal of Contractors: A record of appraisals over the years will serve as a useful tool in taking a decision on award of works to a particular contractor and also in renewing his registration. It is suggested that a much simpler pro forma, to be filled by each EE, may be designed for this purpose. Failures in work carried out by the contractor during the defect liability period and a quality index assigned to those works during quality audits, should find a place in the pro forma. The pro forma should be filled up each year and all such reports of a contractor should be kept in a single file or electronic medium so that they are readily available when needed. For this we can build the new electronic system like “Contract Management System”. In which Maintaining & publishing of the blacklisted contractors by the GoP, not only within the state of Punjab but also in rest of India. Manage performance of contractors for not only taking corrective actions against non or ill-performing contractors but also to give incentives to good performers. This system we can incorporate in Road asset management system which is under development in PRBDB.

Time of completion: The time required for completion of a project should be carefully assessed based on scientific parameters and indicated in the tender schedule. The seasonal variations, cost of works, probable time required for procuring materials, the sequence of operation contemplated and other limiting factors which have a bearing on the progress of the work should be taken into account while fixing the time of completion. The time of completion should be reckoned from the date of handing over of site.

2. Public Private Partnership (PPP): Currently, majority of the public works projects are being undertaken by the DPW alone, leading to several issues such as the ones highlighted above. It is recommended that the state government leverages the potential of PPP projects wherever they are feasible. PPP concessions can be sustained either through user charges, which can be collected by the concessionaire or through annuity payments made by the government. Past experience shows that projects based on annuity are comparatively expensive, while conventional contacts are prone to time and cost overruns. Annuity payments are typically borne by the government out of annual budgetary allocations spread over time and are essentially in the nature of deferred budgetary payments. For annuity-based projects, it is suggested that either a transparent Value for Money (VfM) analysis is done wherever feasible, or EPC/ turnkey contracts are executed since in general, from the government’s perspective, the costs of an annuity project do not represent VfM. PPP model has been used extensively in the road sector at both the Center and in the states, and it will remain an important instrument as laid down in the Approach paper to the Twelfth Five-Year Plan. 3. Absence of adequate, proper documentation for the sector: This includes the following aspects:

a. Preparation of State Road Policy/ Plan: There is absence of a full-fledged master plan or policy with targets that are being pursued by the department. The need for having a state road policy or plan cannot be over-emphasised. Given the ever-increasing demand for road and bridges infrastructure, such an initiative is necessary, whereby the objectives, strategies and implementation plans in the sector are defined and the issues involved therein are addressed to ensure that a safe, efficient and effective road network can be developed and sustained over the years. A clear and realistic strategy for the maintenance of roads, buildings and bridges needs to be incorporated in this policy/ plan document. States like Karnataka, Chhattisgarh and Mizoram have specific road policies whereas the state of Maharashtra has a Road Development Plan for 2001-2021. The state of Kerala is currently in the process of preparing its road policy, which is aimed at developing a sustainable road network, keeping in view the traffic requirements of the future.

b. Adoption of Maintenance Norms: There is a need for implementation of maintenance norms by road type, esp. for ‘Other District Roads’ for which no budgetary allocation was found (costed subsequently)

4. Update of computerised database: There exists a computerised database for roads but the same is not updated on a regular basis. For bridges and buildings, a separate list is not hosted on the DPW’s official website. It is suggested that the roads inventory should be updated on the DPW’s website along with the introduction of bridge and building inventory.

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5. Institute a structured Road Safety Audit Mechanism: Accident rate of 22.9 per one hundred thousand population in Punjab is much higher than the National average of 44.8. This underlines the need for setting up a “Road Safety Audit Mechanism” and it may be conducted at design, supervision/ construction & during operation/maintenance stages. One of the key factors which impact the incidence of road fatalities is road infrastructure, both in terms of road design policies and actual upkeep of roads after construction. Hence, it is imperative that road safety norms are an important element of the overall road policy proposed for the state. For this purpose, the most critical intervention suggested is to institute a Road Safety Audit Mechanism whereby a Road Safety Audit is conducted at each of the three stages of design, supervision/ construction and during operation and maintenance. The details proposed for implementing the said mechanism are given below:

I. Road Safety during the Design stage: During the design stage, it is suggested that there is a Road Safety Consultant who will work to ensure that an element of road safety is incorporated during preparation of the detailed project report (DPR). Some of the important design elements which can be considered are given below:  Geometric and safety standards Flyovers  Grade separators By-passes  Railway Over/Under bridges Bus/truck lay-byes  Informatory retro-reflective sign boards Crash barriers  Median railings  Thermoplastic road markings Traffic lights and delineators Service lanes.

II. Road Safety during the Construction/Supervision stage: It is recommended that the contractor’s team includes a Road Safety specialist during the process of construction of works. If such a specialist is not available, the department may provide its own Road Safety consultant at a pre-approved rate.

In addition, we understand that the Department is currently developing a GIS based Road Asset and Maintenance Management Information System. It is certainly a welcome move and it is expected that this will serve as a comprehensive database of all types of roads across the length and breadth of the states.

5.4.2 Suggesting reform interventions and estimating the associated cost implications This section presents the priority intervention proposed to address the issues identified in section 5.4.1. It also discusses the methodology undertaken to cost the expenditure estimates for these suggested interventions for the MTEF period from 2016-17 to 2018-19.

It may be noted that the reform interventions suggested here have been derived from the opinions and personal experiences of the key informants, and the team’s interpretations of the interviews and secondary data sources. Primary data were not collected through any sample surveys as this is entirely outside the purview of MTEF preparation - for that purpose, separate Public Expenditure Tracking Surveys (PETS) and Impact Evaluation Studies are conducted.

5.4.2.1 Implementation of norms for maintenance expenditure Good maintenance requires a steady and reliable flow of funds. As highlighted earlier, the road maintenance budget has been low as a result the quality of roads in the state is not up to the mark and the fatality rate in the state has also been high. Poorly maintained roads constrain mobility, significantly raise vehicle operating costs, increase accident rates and their associated human and property costs, and aggravate isolation, poverty, poor health, and illiteracy in rural communities.

Reasons for why allocation of adequate fund for maintenance activity are not paid adequate attention typically include limited understanding of the economic and social importance of maintenance; tendency to favour

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construction activities due to their more visible and popular impact over maintenance; or constraining fiscal pressures which at times do justify deferring maintenance activities.

Recognizing the importance of ensuring sufficient commitment for road maintenance, norm-based expenditure is recommended to be spent. This is explained subsequently.

At the outset, current inventory of roads maintained by the DPW is presented below.

Table 77: Roads of different classes being maintained by DPW (in km)

Type of Road Inventory

State Highways (SH) 1,133 Major District Roads (MDR) 1,826 Other District Roads (ODR) 5,000 National Highways (NH) 1,844 Source: Data collected from DPW as on 31.1.2016

It may be noted in above context that:

 Of the 2,625 km of National Highways in the State, the DPW (B&R) maintains 1,844 km (in above Table 77), the NHAI maintains 749.39 km and the Municipal Corporation in the state maintains 31.85 km. However, the maintenance activity is financed by the NHAI. Hence, since the maintenance expenditure for NHs is not borne by the state government, we have not estimated cost of maintaining NH.

 Further, of the 60,243 km of Link Roads in Punjab (as on 31.03.2014), the DPW (B&R) maintains 31,384 km while the Punjab Mandi Board (PMB) maintains the remaining 28,859 km. But here too, the financing does not come from the state government’s budget and thus not costed.

Before proceeding on to implement the methodology for computing norm-based maintenance budget, it may be useful to clarify on the varied maintenance activities relevant for budgeting expenditure:

 Ordinary Repairs (OR): This activity involves routine maintenance, such as, maintenance of culverts, patch repairs, crack sealing, roadside drainage, repairing of shoulders, painting of highway signs and km stones, arboriculture and turfing, road marking, maintenance of gang huts and store sheds, removal of litter, debris and dead animals and replacement of damaged retro-reflective signs, etc. The routine maintenance for roads would need additional resources for footpath repairs, street lights; minor repair of flyovers and subways, railings as well as removal of encroachments in urban areas and maintenance of breast walls/retaining walls etc. in hill areas. The routine maintenance of bridges requires additional attendance to bearings, joints, wearing coat, railings, minor repairs to sub-structure and super-structure as well as clearance of weeds, etc. in the river channels.

 Periodical renewal (PR): This activity involves provision of renewal coat to the wearing surface at a predetermined frequency. This is done to safeguard the road crust and at the same time giving pavement a better riding surface. This treatment is supposed to be carried out only with the help of mechanized equipment and in continuous stretches of at least 5 km to 10 km. The periodicity is influenced by factors such as rainfall, altitude and traffic density.

 Special Repairs: This activity deals with urgent works of original nature, such as, minor improvement to curves, improvements to visibility, repairs to culverts, bridges, etc. The maintenance norms specify that 15% of total amount of Ordinary Repairs and Periodical Renewal should be earmarked for special repair in plain/rolling terrain and urban areas.

 Emergent Repairs: This activity involves immediate repairs to roads affected by heavy rains/flood, cyclone, landslides, etc. to restore traffic. Maintenance repairs specify that a provision of 15% of the total

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amount of Ordinary Repairs & Periodical Renewals should be earmarked for emergent repair in plain/rolling terrain and urban areas.

 Separate Norms for National Highways/ State Highways: The National Highway network throughout the country and the State Highway network within the respective states constitute the backbone of the road transport network in the country. As this category of roads caters to high intensity traffic (including heavy axle roads), the same are necessary to be maintained as all weathered roads to the extent possible. These roads are eligible for a higher level of maintenance and hence separate norms have been recommended for the same.

For National Highways/ State Highways, maintenance norms have been calculated for double lane (7.0 m) with 1.5 m wide paved shoulder per year per km for B.T. surface. It has been recommended that on NH/SH, WBM surfaces should be black topped on priority. Therefore, no norms have been recommended for WBM surfaces in case of NH/SH.

 Separate Norms for MDR/ODR/LR: The major constituents of the road network in the country are the roads falling in the category of MDR/ODR/LR. These roads generally carry local traffic and as they are exposed to road traffic of lesser intensity, the maintenance requirements are different from the ones mentioned above. For MDR/ODR/LR, maintenance norms have been calculated for double lane (7.0 m) without shoulders per year per km for B.T. surface.

Procedure for updating maintenance norms: For estimating the requirements, inputs have been drawn from the “Report of the Committee on Norms for Maintenance of Roads in India" which was brought out by the Ministry of Roads, Transport and Highways (MoRTH) in 2001. The said report laid down the guidelines for maintenance of roads in India. The norms for maintaining roads contained in the document have been used to update maintenance expenditure for 2015-16 and for making projections for the MTEF period, 2016-19.

As prescribed under the Committee Report, a mathematical model for annual update of norms by linking labour component with Consumer Price Index (CPI), material component with WPI and machinery component with average price of fuel has been given as under:

Percentage Increase in cost for the subsequent years = {FL (I1 – Io)/1o + FM (W1 – W0)/Wo + FF (f1 – f0)/fo} * 100 Where, FM = Material component FL = Labour component FF = Machinery component I1 = Average consumer price index for the year under consideration W1 = Average wholesale price index for the year under consideration f1 = Average fuel price litre for the year under consideration 0 = Average consumer price index for 1999-2000 W0 = Average wholesale price index for 1999-2000 f0 = Average fuel price per litre for 1999-2000 The weightage of labour, material and machinery for the update of the formula is given in below Table 78. For example, in case of ordinary repairs of NH/SH, shares of labour, material and machinery in maintenance cost are 28%, 66% and 6% respectively while for periodical repairs, the ratio is 5:70:25.

Table 78: Percentage of Labour, Material and Machinery in maintenance cost

Ordinary Repairs Periodical Repairs Road Category Material Labour Machinery Material Labour Machinery NH/SH 0.66 0.28 0.06 0.70 0.05 0.25 MDR/ODR/VR 0.67 0.30 0.03 0.72 0.10 0.18 Source: Report of the Committee on Norms for Maintenance of Roads in India by MORTH, 2001

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Further, the data in terms of inflation and fuel prices used for updating costing norms prescribed in the Committee report is provided in below Table 79.

Table 79: Data for updating costing norms

Index 2000-01 2014-15 Percentage increase WPI 77.58 182.02 2.03 CPI 51.36 135.96 1.65 Fuel Price 30 70 1.33 Source: RBI for WPI, CPI

Based on the information captured in above Table 78 and Table 79, the total percentage increase in cost of norms for ordinary and periodical repairs is as follows:

Table 80: Total increase in road maintenance cost norms during 1999-2000 until 2014-15

Road Category Ordinary Repairs Periodical Repairs 260.33% 258.04% NH/SH (0.66*2.03+.28*1.65+.06*1.33) (0.70*2.03+.05*1.65+.25*1.33) 225.66% 186.88% MDR/ODR/VR (0.67*2.03+.30*1.65+.03*1.33) (0.72*2.03+.10*1.65+.18*1.33)

Using these cost norm increases in percentages, the maintenance expenditure norms in terms of INR per km per year for the two types of repairs have been updated. The state of Punjab has been assumed to fall in Price Zone V.

Table 81: Updated maintenance cost norms for Ordinary Repairs

Category of road (double lane) Traffic 450-1500 1500- More than Avg. cost per <450 CVD CVD 4500 CVD 4500 CVD km- estd. ORDINARY REPAIRS (OR) B.T Surface B.T B.T Surface BT Surface Surface SH (1999-2000) 83,038 89,064 99,407 107,592

Updated cost in 2014-15 (using 299,212 320,926 358,195 387,688 341,505 factor of 260.33%) MDR/ODR/VR (1999-2000) 38,690.00 39,595.00 42,300.00 45,424.00

Updated cost in 2014-15 125,998 128,945 137,754 147,928 135,156 (using factor of 225.66%) Source: Report of the Committee on Norms for Maintenance of Roads in India by MoRTH and PwC's computed updated norms

Table 82: Updated maintenance cost norms for Periodical Repairs

Category of road (double lane) Traffic Traffic 150- Traffic 450- Traffic Avg. cost <150 CVD 450 CVD 1500 CVD >1500 CVD per km- estimated PERIODICAL REPAIRS B.T Surface B.T Surface B.T Surface B.T Surface SH (1999-2000) 195,440 259,026 290,497 429,884 Updated cost in 2014-15 699,748 927,410 1,040,088 1,539,145 1,051,598 (using factor of 258.04%) MDR/ODR/VR (1999-2000) 38,692 104,317 129,397 145,035 Updated cost in 2014-15 111,001 299,268 371,218 416,081 299,392 (using factor of 186.88%) Source: Report of the Committee on Norms for Maintenance of Roads in India by MoRTH and PwC's computed updated norms

As learnt from our discussions with DPW officers, while the updated norms for ordinary repairs are realistic, but the norms for periodical repairs for SH are grossly inadequate. Hence, in due consultations with DPW, the

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maintenance norms for periodical repairs for various types of roads have been taken as follows: SH- INR 3 million per km; MDR- INR 2.3 million per km and ODR- INR 1.7 million per km.

After updating applicable norms for unit maintenance cost for varied type of roads, total projections for maintenance budget by multiple these norms with inventory of roads in the state have been estimated below for FY2015-16. It may be noted that since ORs are conducted once in every year while frequency of PRs is once every 5 years, hence one-fifth of budget is distributed for PR annually to ensure commitment of funds. Further, for projecting maintenance budget for subsequent years, 10% growth rate is assumed based on discussions with DPW officers.

Table 83: Projections of road maintenance costs (in INR million)

2015-16 2016-17 2017-18 2018-19 Type of road/ repair work (P) (P) (P) (P) State Highways 1,070 1,180 1,290 1,410 Ordinary Repair 390 430 470 510 Periodic Repair 680 750 820 900 MDR 1,090 1,190 1,320 1,450 Ordinary Repair 250 270 300 330 Periodic Repair 840 920 1,020 1,120 ODR 2,380 2,610 2,880 3,160 Ordinary Repair 680 740 820 900 Periodic Repair 1,700 1,870 2,060 2,260 Total 4,530 4,980 5,490 6,020 Source: PwC calculations and discussions with DPW officials

5.4.3 Summary of Costed Reform Interventions It may be noted that maintenance expenditure was already projected under baseline/ trend scenario in sub- section 5.3. Further, in foregoing sub-section 5.4.2.1, recommended levels of norm-based maintenance expenditure have been estimated to ensure quality of various types of roads in the state. Thus, additional expenditure recommended under reform scenario is shown in below table.

Table 84: Bottom-up Projections of Costed Reform Interventions in DPW (in INR million)

Reference 2016-17 2017-18 2018-19 S. Proposed Reform Intervention Table (P) (P) (P) No. Maintenance costs for recommended norm- Table 83 4,980 5,490 6,020 1 based levels Budget allocation for maintenance computed Table 70 4,390 4,740 5,100 2 under baseline/ trend scenario

3 Net additional costed reform intervention (1-2) 590 750 930

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5.5 Reconciliation and Reprioritization

5.5.1 Reconciling expenditure requirements with resources It is necessary to reconcile ‘bottom-up’ expenditure requirements with ‘top-down’ estimation of resource availability for the department to assess their affordability. This has been presented in Table 85.

Table 85: Reconciliation of projected expenditure estimates with projected resources available to DPW for the period 2016-17 to 2018-19 (in INR million)

S. 2014-15 2015-16 2016-17 2017-18 2018-19 Head Basis No. (RE) (P) (P) (P) (P) Top-down budgeting: 1 Departmental Table 68 14,730 17,252 18,849 20,345 22,186 Resource Ceiling Bottom-up budgeting: Trend Scenario 2 Table 70 9,752 10,759 18,748 20,571 22,581 Expenditure Requirements Trend deficit (-)/ surplus (+) with 3 (= 1-2) 4,978 6,493 101 (225) (395) respect to resource availability Bottom-up budgeting: 4 Costed Reform Table 84 - - 592 747 926 Interventions MTEF deficit (-)/ 5 surplus (+) before re- (= 1-2-4) 4,978 6,493 (491) (973) (1,320) prioritization exercise

The projected resource envelope shows that it is not adequate to meet trend projection expenditure in two out- years of MTEF period. Moreover, expenditure projections for reform interventions are not affordable by the top-down projected resource growth in any of the three-year MTEF period.

5.5.2 Reprioritization In view of the constraining resource ceiling for reform scenario projections for all the years of MTEF, ways need to be explored either to release resources from baseline budget to finance the identified reform interventions and/ or to re-prioritize these reform interventions.

5.5.2.1 Release resources from Baseline Budget The additional expenditure estimates for the suggested reform interventions over and above the baseline budget can be provided by reducing allocations to either low priority schemes or cutting down allocations in those inefficient schemes wherein utilization has been critically low in the past.

For the purpose, the average utilization in plan schemes (i.e. center sector, state plan and CSS) in the past three financial years, i.e. FY 2012-13, FY2013-14 and FY2014-15 (actuals/ RE versus their budgetary estimates) as observed comes to 80%. Accordingly, this 80% has been applied on the baseline budget estimated for plan schemes in Table 70 to finance the norm-based additional maintenance expenditure estimated above under reform scenario.

After doing this re-prioritization exercise, the MTEF deficit has been fully met and in fact, there is surplus amount available with the Department. Accordingly, the final MTEF projections after reconciling top-down and bottom-up budgeting is presented in Table 86 below.

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Table 86: Final MTEF Projections of DPW (in INR million)

2014-15 2015-16 2016-17 2017-18 2018-19 S. No. Head (RE) (P) (P) (P) (P) Top-down budgeting: Departmental 1 14,730 17,252 18,849 20,345 22,186 Resource Envelope 2 Bottom-up budgeting (a + b - c) 9,752 10,759 16,879 18,611 20,529 Baseline Scenario Expenditure 2.a) 9,752 10,759 18,748 20,571 22,581 Requirements Plus: Costed Additional Reform 2.b) - - 592 747 926 Interventions Minus: Savings due to reduced allocation 2.c) - - 2,461 2,707 2,978 based on past utilization rates

3 MTEF Surplus (+)/ Deficit (-) (1-2) 4,978 6,493 1,970 1,734 1,657

Reconciled MTEF Projections (after 4 9,752 10,759 16,879 18,611 20,529 deliberations with Department of Finance) 4.a) Reconciled MTEF Plan projections 5,655 6,220 10,237 11,357 12,596 4.b) Reconciled MTEF Non-Plan projections 4,098 4,539 6,642 7,254 7,933

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6 MTEF for Power Department

This chapter presents the MTEF prepared for the Power Department, Govt. of Punjab for the FY2016-17, thus also containing forward estimates for FY2017-18 and FY2018-19. 6.1 Long-term sector strategy & departmental objectives

The MTEF is prepared keeping in view the overall long-term strategies adopted by the GoP for the concerned sector i.e. Energy, in its Five Year Planning exercise and the vision of the department. The aim of the MTEF is to reinforce realisation of the long term plans of the state government and objectives of the department through medium term interventions to be updated on a rolling basis. In this context, it may be useful to present an overview of the strategy and objectives for the sector.

6.1.1 Strategy for Energy Sector The state aims for dependable, abundant and quality power for all in an eco-friendly, sustainable and cost- effective manner. A glance through the three recent most Five-Year Plan (FYP) allocations of Punjab reveals that there has been a decrease in allocation towards energy sector out of total plan funds allocated for 11 sectors. The allocation to energy sector has reduced from 32.14% in 10th FYP to 24.75% in 12th FYP.

Table 87: Allocation under the energy sector out of total allocated funds under FYP (in INR million)

Share of Allocations to FYP Total Outlay Outlay for Energy Energy Sector 10th FYP (2002-07) 186,570 59,980 32.14% 11th FYP (2007-12) 289,230 80,750 27.91% 12th FYP (draft 921,000 228,000 24.75% projections, 2012-17)

Break-up of the approved allocations under the energy sector is presented in Table 88 below. It is evident that an overwhelming majority of the allocation under the energy sector is towards conventional sources.

Table 88: Allocation of funds (approved outlay under Annual Plan) under the Energy Sector since 2011-12

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 Power 99.65% 99.59% 99.53% 99.58% 99.47% Non-Conventional Source of Energy 0.35% 0.41% 0.47% 0.01% 0.19%

Further, as can be seen from Table 89 below, from 2011-12 to 2014-15, the rate of utilisation of allocated funds has increased from 51% to 76% in schemes/ programs relating to conventional sources of power.

Table 89: Utilization of allocated funds under Annual Plan

Particulars 2011-12 2012-13 2013-14 2014-15 Power 51% 58% 85% 76% Non-Conventional Source of Energy 0% 7% 0% 0%

6.1.2 Objectives of Department of Power The Department of Power, a key administrative department of the Govt. of Punjab has two wings, viz.:

A. POWER WING: The business rules allocated to this Wing are:

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 All matters relating to the administration and enforcement of the following Acts and Rules made there under: The Indian Electricity Act 1910; The Electricity (Supply) Act 1948 and the Punjab Electricity (Duty) Act, 1958

 All matters relating to: The Electrical Inspectorate and the Punjab State Electricity Board (PSEB)

 Formulation and implementation of Power schemes and projects.

B. GENRAL WING: The business rules allocated to this Wing include:

 All matters relating to the Bhakra Nangal Project, Beas Project, Thein Dam Project and Shahpur Kandi Project

 Matters relating to other Hydro-electric projects including Inter-State projects.

Further, the Punjab State Electricity Board (PSEB) was constituted on 1 February 159 as an integrated power utility under the Electricity (Supply) Act 1948. It was responsible for discharging the generation, transmission and distribution functions until the reforms initiative were undertaken in the state. Unlike other states like Odisha, Haryana, Punjab has been slow in reforming the sector. Unbundling of PSEB (and that, not in the full sense as achieved in other states) into below two companies could be affected in April 2010 only:

(i) Punjab State Power Corporation Ltd. (PSPCL): Entrusted with the functions of generation, distribution, wheeling and retail supply of electricity in the state.

(ii) Punjab State Transmission Corporation Ltd. (PSTCL): Assigned with the functions of transmission of electricity in the state, including functions of State Load Dispatch Center (SLDC).

Also, the Punjab State Electricity Regulatory Commission (PSERC) was established on 31.3.1999 under the provisions of the Electricity Regulatory Commissions Act, 1998, a Central Act which was superseded by the Electricity Act, 2003. The Commission is assigned various functions, such as determination of tariff for generation, transmission and wheeling of electricity, supply to wholesale, bulk or retail consumers etc.

Achievement of Department of Power: Noteworthy achievements of the Department are listed below:

 All the power stations operated at their best ever plant load factor since their installation.  Net power generated during 2008-09 is 37222 million units, which is more than 2006-07 by 2238 million units resulting of 6.40% increase in two years.  The 1980 MW (3x660) Talwandi Sabo Power Project awarded to M/s Sterlite Energy Ltd. Mumbai on 4.7.08 and PPA signed on 1.9.08.  Power purchase agreement with M/S GVK for installing 2x270 MW thermal power station at Goindwal Sahib signed on 26th May 2009.The foundation stone has been laid and the company has started the construction.  Second stage of Lehra Mohabbat Thermal Power Station for 2x250 MW has been commissioned. Its Unit-III achieved CoD on 16.10.08 and Unit-IV synchronized on 2.8.08 on coal.  476000 new connections including 61849 No. tubewell connections were released during 2007-09.  24 Hrs. Urban pattern supply made available to 12428 villages and 6158 Deras/ Dhanies with 5 or more houses.  To help SC & BPL consumers, free monthly consumption up to 200 units allowed for connected load of 1000 watts w.e.f. 12-10-06 instead of earlier 500 watts.  Strict measures have been taken to reduce power theft. Disciplinary action taken against the erring employees and 5 numbers Anti Power Theft Police Stations have been set up.

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 New technologies like electronic meters, remote control of transformers, remote meter reading and HVDS system for AP/ Industries introduced.  2.03 million meters out of 5.59 million General/ Industrial Consumers shifted out of their premises as on 31.3.09 to curb theft of energy.  All these measures have helped in reducing losses by 4% from 23.92% (2006-07) to 19.91% (2008-09) / which resulted in substantial increase in revenue.  During 2007-09, 62 numbers New Grid substations erected and capacity at 132 number Grid substations augmented besides addition of 1070 circuit Kms. Transmission line and 149 MVAR shunt capacitors to State Grid.

6.1.3 Scope of MTEF for Department of Power

Since the Punjab State Power Corporation Ltd. (PSPCL) and Punjab State Transmission Corporation Ltd. (PSTCL) are autonomous institutions which are not dependent on State’ budgetary resources (except for performing the function of disbursement of power subsidies), hence this MTEF prepared covers expenditure for meeting operational expenses consequent to functioning of the Electrical Inspectorate Office under Department of Power and subsidy disbursement. It was also noted that the budget head of account pertaining to land acquisition staff for the Punjab State Electricity Board is reflected under the Department of Power (15-2070-00-800) but it was learnt that this account is fully reimbursable. Hence, projections for this head are not required.

Herein, it is noteworthy that the office of the Chief Electrical Inspectorate headquartered in Patiala was created under section 161 of the Electricity Act 2003 and is under the administrative control of Principal Secretary. The Office is responsible for the administration and implementation of the Electricity Act 2003 Rules and Regulations made thereunder and is also the State Act and Rules/ Regulations concerning to the Electricity promulgated by the State Government, the detail of which are as below:  Electricity Act 2003  Host of Central Electricity Authority Regulations  Punjab Licensing Board constituted under Rule 45 of Indian Electricity Rules 1956 (now Regulation 29 of Central Electricity Authority, Regulations 2010)  Punjab Cinemas (Regulation) Act 1952 & Rules (Regulations) 1952  Punjab Electricity (Duty) Act 2005 and Punjab Electricity (Duty) Rules 1958.

It may further be noted that the expenditure covered under the MTEF preparation for Department of Power are all non-plan in nature.

6.2 Top-Down Budgeting- Estimation of Resource Envelope

Estimating ‘Resource Envelope’ involves projecting the likely availability of resources in the future within which the department is expected to fit in its expenditures. The methodology has already been discussed in Chapter 2. The analysis and results are discussed here for the Department of Power.

6.2.1 Step I: Fiscal Policy Resource Ceiling for State Total Expenditure Projections for all three sources of government receipts viz. (1) revenue receipts, (2) non-debt capital receipts and (3) fiscal deficit (net of debt receipts) have been taken from the Medium Term Fiscal Framework (MTFF).

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Table 90: Estimation of Fiscal Policy Resource Ceiling for State Total Expenditure (in INR million)

S. 2014-15 2015-16 2016- 2017-18 2018-19 Item Basis No. Expected* Expected* 17 (P)** (P) (P) 1 Total Revenue Receipts 390,230 MTFF 456,480 494,084 535,190 580,154 Non-debt Capital 2 1,184 MTFF 1,248 1,311 1,376 1,445 Receipts Fiscal Deficit 3 109,165 MTFF 121,077 128,835 124,834 128,633 (Net Debt Receipts) Fiscal Policy Resource Ceiling for 624,23 4 State Total 500,579 578,806 661,401 710,232 0 Expenditure (1 + 2 + 3) * Base year for MTFF projections is expected estimated for FY 2015-16 (data as provided by the Department of Finance, Govt. of Punjab) for all except for two revenue items of: (a) state lottery, (b) recovery of loans & advances, and three expenditure items of: (c) salary, (d) pension and (e) loans and advances given by State Government for which the base year is expected estimates for FY 2014-15. ** P within brackets, i.e. (P) in this report denotes the projections made

6.2.2 Step II: Departmental MTEF Non-Plan Budget Resource Ceiling Non plan resource ceiling for Department of Power is projected based on the average historical share of the departmental expenditure in state’s total expenditure. Thus, the total likely resource availability for Department of Power for next three years is presented in Table 91.

Table 91: Estimation of MTEF Non-Plan Budget Resource Ceiling for Department of Power (in INR million)

2013- 2014-15 2015-16 2016-17 2017-18 2018-19 S. No. Item Basis 14 (RE) (P) (P) (P) (P) 5 Projected Non Plan Historical Expenditure = MTEF 44,400 51,000 share in (4) 58,687 63,220 66,982 71,911 Resource Envelope 10.14% for Power (non-plan)

6.3 Bottom-Up Budgeting- Baseline Budget/ Trend Scenario

The first step under bottom-up budgeting is estimating the expenditure requirements of the Department of Power based on the trend observed in the past years. Expenditure projections based on trend indicates the expenditure requirement that need to be incurred for continuation of the current schemes and sustain current level of performance indicators in service delivery at the historical rate.

6.3.1 Basis used for projections Trend scenario projections for the schemes under Power for the next three-year period, i.e. FY 2016-17 to FY 2018-19 using 2014-15 (RE) as the base year have been done as follows.

6.3.1.1 Punjab Electrical Inspectorate - assumed to be in continuum, projected at object head level  Salaries and Wages (Object head- 01): Projections for salaries and wages have been done in accordance with the state’s average annual growth in salaries over a period of 12 years. The average growth rate comes out to be 12%.

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 Inflation Based Projection for rest of SOEs: Expenditure under the Object Head such as Domestic Travel Expenses, Office Expenses, Rents, Rates, Taxes, Publications, Other Administrative Expenses, Supplies And Materials, Cost Of Ration, Advertising And Publicity, Minor Works, Maintenance, Motor Vehicles, Machinery And Equipment, Major Works, Telephones, Electricity Charges, Water Charges and Computerisation have been projected using inflation rate since own trend growth was erratic in the past and hence out of reasonable bounds. Inflation rate applied is 5.25% which existed as of August 2015. Expenditure under the above-mentioned object heads have been projected year-wise by applying the inflation rate on previous year’s allocation.

6.3.1.2 Subsidy disbursements Projections for both agriculture subsidy and domestic subsidy (for both SC and non-SC BPL segments) have been made based on assumed annual growth of 10%. This has been decided in due consultations with officials of the PSPCL and Department since the own trend growth rate observed was erratic and hence out of reasonable bounds.

6.3.2 Expenditure Projections under Trend Scenario Table 92 presents the MTEF projections for Department of Power at scheme (SOE) level for the next three years. Inclusive in these projections is the status of delivery of services by the department, i.e. projections have been made assuming that the department will continue delivering services at the present level.

Table 92: MTEF Projections- Trend Scenario (all non-plan in nature) (in INR million)

SOE 2014-15 2015-16 2016-17 2017-18 2018-19 MH SMH Mh SH SOE Description RE BE (P) (P) (P) Punjab Electrical Inspectorate

2045 0 103 1 1 Salaries 41.0 45.1 55.5 61.5 50.0 Domestic Travel 2045 0 103 1 11 1.6 0.5 Expenses 0.4 0.4 0.4

2045 0 103 1 13 Office Expenses 0.2 0.2 0.2 0.2 0.2 Rents, Rates, 2045 0 103 1 14 1.6 1.6 1.7 1.8 Taxes 1.7

2045 0 103 1 24 P.O.L 0.2 0.2 0.2 0.2 0.2

2045 0 103 1 50 Other charges 0.1 0.1 0.1 0.1 0.1

2045 0 103 1 51 Motor Vechicles - - - - - Medical 2045 0 103 1 91 0.7 0.7 0.7 0.8 Reimbursement 0.7

2045 0 103 1 92 Telephones 0.1 0.1 0.1 0.1 0.1 Electricity 2045 0 103 1 93 0.4 0.4 charges 0.4 0.4 0.4

2045 0 103 1 94 Water charges - - - - -

Total 45.6 48.6 59.4 65.6 53.7 Subsidy disbursement Domestic 2801 0 101 1 33 Subsidy (for 6,550 91,370 10,050 11,060 12,160 both SC & non-

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SOE 2014-15 2015-16 2016-17 2017-18 2018-19 MH SMH Mh SH SOE Description RE BE (P) (P) (P) SC segments of population) Agriculture 2401 0 104 2 33 42,197 47,099 51,810 56,990 62,690 Subsidy

6.4 Bottom-Up Budgeting- Costed Reform Interventions

After estimating the baseline budget, the second part of bottom-up budgeting involves: (i) Identification of issues and gaps in service delivery; and (ii) Suggesting reform interventions and estimating the associated cost implications.

6.4.1 Identification of issues and suggesting reform interventions with associated cost implications Following four interventions, aimed at making the process of agriculture subsidy disbursement efficient and reducing losses, have been identified.

6.4.1.1 Data used from segregated Agriculture feeders for estimating Agri. Sales & 100% metering of Feeders

Prior to feeder segregation, agriculture consumption used to be estimated on a thumb rule basis. This often used to lead to inaccuracies in energy consumption and subsequently in subsidy calculations. Feeder segregation implemented by the GoP helps in accurate calculation of sales and distribution losses thereby contributes to generating savings.

6.4.1.2 Robust load management and demand forecasting for reducing short-term power purchase costs Inaccurate demand forecasting results in inaccurate power management and procurement. This in turn, results in increased purchase of expensive short-term power for meeting demand. A robust load management and demand forecasting is expected to help in optimization of power purchase costs and improving financial position.

6.4.1.3 Implementation of HVDS on Agriculture Feeders

To enhance the power supply efficiency and have a better control on energy losses, PSPCL has embarked on implementation of High Voltage Distribution System (HVDS) in Punjab for agricultural power supply. These losses majorly emerge at the low voltage end of the distribution network. HVDS on agriculture feeder network reduces losses on the LT network by extending the HT network closer to the individual connections. It further ensures lower technical losses as well as protection against pilferage.

6.4.1.4 Better Targeting of Subsidies

To improve the targeting of power subsidy in the State, a strategy paper was developed by the GoP which laid out two options for implementing a scheme on optimizing power supply to agriculture consumers

Option 1: Restricting power supply to agriculture consumers as per the 'normative supply hours' requirements of the zone. Option 2: Free Supply of Power up to 'normative energy consumption' and incentivizing metering.

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The GoP after several discussions with PSPCL and other stakeholders has opted for Option 1, wherein power supply to agriculture consumers would be restricted as per the normative supply hours. In order to determine the normative supply hours, the Punjab Agriculture University (PAU) was engaged to conduct a study for estimating the electrical tubewell operating time for groundwater for the Kharif season 2014-15 and Rabi season 2013-14. The report submitted by them in September, 2015 states the need to take additional initiatives to curtail the groundwater pumping and reduce energy consumption, which would also have a direct bearing on the subsidy being paid out, Further, the report states that the use of groundwater should be reduced to the extent possible and the number of working hours for the tube well should be restricted to save groundwater. Based on a detailed analysis of data (type of crop, capacity of tube well motors, ground water depths, area under irrigation etc.) under various scenarios, the Directorate of Research of the PAU submitted its recommendations on normative supply hours for various types of crops and seasons.

Based on these recommendations a gazette notification was issued by Department of Power, Government of Punjab (vide Notification No.1/33/08-EB (PR)/653 dated 12 October 2015 published in the Official Gazette on 14th October, 2015) for the schedule of power supply of the Agriculture Pump set connections in the State as per different crops and seasons. It was operational until 31 March 2016. Subsequently, a fresh notification No. 1/33/08-EB (PR)/194 was issued on 25th March 2016 for FY 2016-17 and onwards. The notification is based on the recent study carried out by the Agriculture Department on the basis of which the schedule of power as mentioned in the table below was drawn upon. The power supply hours shall be generally followed, however keeping in view weather conditions i.e. draught like situation, excessive rains, floods or due to other reasons beyond control, supply hours can also be modified accordingly so that the crops of the farmers do not suffer. The power supply hours to vegetable, floriculture, horticulture farming may vary according to requirement of the crop and season.

Period Timings a) 1st April to 14th June . 8 hours Power Supply on alternate days. b) Exception to above: 20th April . With the exception to above that the feeder having more the 50% area under to 20th May cotton or other kharif crops should be provided with 8 hours daily electricity from (20th April to 20th May) and the extra power supplied can later be adjusted. 15th June to 30th September 8 hours Power Supply per day. 1st October to 31st March 10 hours power Supply on alternate days.

6.4.1.5 Costing of reform interventions

The impact of implementing above four reform interventions on reduction in subsidy burden is presented in below Table 93.

Table 93: Savings generated in agriculture subsidy disbursement (in INR million)

Assumed % Impact Intervention reduction in 2016-17 2017-18 2018-19 period subsidy* (1) Agriculture Subsidy under baseline 51,810 56,990 62,690 scenario REFORM INTERVENTIONS (2) Data used from segregated Agriculture FY 14 5% feeders for estimating Agri. Sales and Onwards [as % of (1)] 2,590 2,850 3,130 100% metering of Feeders (3) Robust load management and demand FY 17 2% forecasting for reducing short term power Onwards [as % of (1)-(2)] 1,080 1,190 purchase costs (4) Implementation of HVDS on FY 17 3% 1,590 1,750

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Assumed % Impact Intervention reduction in 2016-17 2017-18 2018-19 period subsidy* Agriculture Feeders Onwards [as % of (1)-(2)-(3)] FY 17 5% (5) Better Targeting of Subsidies 2,650 2,920 Onwards [as % of (1)-(2)-(3)] (6) Total Agriculture Subsidy 2,590 8,180 8,990 reduction * Based on empirical evidence

6.4.2 Summary of Costed Reform Interventions The four interventions proposed and costed above for the MTEF period during 2016-17 to 2018-19 are summarily presented in Table 94. Since these are savings generated, hence these are represented with a negative sign.

Table 94: Bottom-up Projections under Reform Scenario for Department of Power (in INR million)

S. Proposed Reform Intervention Reference 2016-17 2017-18 2018-19 No. 1 Baseline Scenario Expenditure Requirements Table 92 61,914 68,105 74,916 2 Agriculture Subsidy Reduction Table 93 (-) 2,590 (-) 8,177 (-) 8,995 3 Reform Scenario Bottom-Up Projections 59,323 59,928 65,922

6.5 Reconciliation and Reprioritization

It is necessary to reconcile ‘bottom-up’ expenditure requirements with ‘top-down’ estimation of resource availability for the department to assess their affordability. This has been presented in Table 95.

It can be clearly seen that due to savings generated in agriculture subsidy, there is a surplus position, alternatively speaking the expenditure requirements are less than estimated resource availability for the department. Keeping in view the competing demands from other department for scarce resources, the final reconciled MTEF projections for Department of Power correspond to bottom-up budgeting estimated as presented in below Table 95.

Table 95: Final MTEF Projections of Department of Power (in INR million)

2014-15 2015-16 2016-17 2017-18 2018-19 S. No. Head RE (P) (P) (P) (P) Top-down budgeting: Departmental Resource 1 51,004 58,687 63,220 66,982 71,911 Envelope 2 Bottom-up budgeting (a+b-c) 48,791 56,285 59,323 59,928 65,922 2.a) Baseline Scenario Expenditure Requirements 48,791 56,285 61,914 68,105 74,916 2.b) Plus: Costed Additional Reform Interventions - - (2,590) (8,177) (8,995) 3 MTEF Surplus (+)/ Deficit (-) (1-2) 2,213 2,402 3,897 7,054 5,989

4 Reconciled MTEF Projections (After 48,791 56,285 59,323 59,928 65,922 deliberations with Department of Finance)

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Annexure 1. Definition of Key Performance Indicators

Department of Health and Family Welfare :  Crude Birth Rate: Crude Birth Rate (CBR) is the total number of births per 1,000 of a population each year.

 Crude Death Rate: Crude Death Rate (CDR) is the number of deaths that occur per 1,000 people each year.

 Infant Mortality Rate: Infant Mortality Rate (IMR) is the number of deaths of infants under one year old in a given year per 1,000 live births in the same year.

 Maternal Mortality Rate: Maternal Mortality Rate (MMR) is the number of maternal deaths per 1,000 women of reproductive age in the population (generally defined as 15–44 years of age).

 Total Fertility Rate: Total Fertility Rate (TFR) of a population is the average number of children that would be born to a woman during her reproductive age.

 Neonatal Mortality Rate: Neonatal Mortality Rate (NMR) is the number of neonatal deaths per 1000 live births. A neonatal death is defined as a death during the first 28 days of life (0-27 days).

School Education Department :  Educational Development Index: Educational Development Index (EDI) is a composite weighted index calculated on the basis of four components of education, viz. access, infrastructure, teachers and outcomes that are assessed based on a number of select indicators.

 Gender parity index: Gender parity index (GPI) is defined as the ratio of girls’ gross enrolment to boys’ gross enrolment at a given level of education.

 Gross Enrolment Ratio: Gross Enrolment Ratio (GER) refers to enrolment at a specified level of schooling, irrespective of the age of student enrolled, to the population of children in the age group expected to be at that level of schooling as per prevalent norms on school enrolments.

 Drop Out rate: Drop Out rate is the percentage of pupils/students who leave school during the year for any reason as well as those who complete the previous grade/year level but fail to enrol in the next grade/year level the following school year to the total number of pupils/students enrolled during the previous school year.

 Net Enrolment Ratio: Net Enrolment Ratio (NER) is defined as enrolment of the official age-group for a given level of education expressed as a percentage of the corresponding population.

 Literacy Rate: Literacy rate is defined as the population of literates in the population aged 7 year and above.

 Pupil Teacher Ratio: Pupil Teacher Ratio (PTR) is defined as the average number of pupils/students per teacher in elementary/ secondary/ Senior Secondary education in a given school year.

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 Student Classroom Ratio: Student Classroom Ratio (SCR) is defined as the average number of students per classroom at any level of education in a given year.

 Transition Rate: Transition rate is the percentage of enrolees in a level of education in a given school year who moved on to the next higher level the following year.

 Retention Rate: Retention rate is the percentage of a school's first-time, first-year undergraduate students who continue at that school the next year.

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Annexure 2. Definition of budget heads The state government’s budget is linked to the accounts and government transactions accounted for under the Consolidated Fund, Contingency Fund and the Public Account of India. Each Division in the Consolidated Fund and the Public Accounts is divided into sectors, which may in some cases be further divided into subsectors and then into the six tiers of accounting classification. The number of classification in the Detailed Demands for Grants are not allowed to go beyond the standard six tiers indicated as under32:

1. Major Head (4 digit code): Major heads normally indicate within each sector/sub-sector, the broad functions of a particular department of government. In the four digit codes allotted to the major heads, the first digit indicates whether the major head is a Receipt head/ Revenue expenditure head/ Capital expenditure head or a Loan head. The last three digits are the same for corresponding major heads in Revenue receipts section/Revenue expenditure section/Capital receipts/expenditure section and Loans and Advances section.

2. Sub-Major Head (2 digit code): Sub-Major Head are opened under a major head to record transactions that are of a distinct nature and of sufficient importance to be recorded exclusively, but at the same time allied to the function of the major head.

3. Minor Head (3 digit code): Major and sub-major heads are subdivided into minor heads. Minor heads correspond to programmes or broad groups of programmes.

The classification up to the minor head level is prescribed by the Controller General of Accounts in consultation with the Comptroller and Auditor General (CAG) and is common to the central and state governments.

The next three tiers of classification are different across states and are left to the state governments to decide. In case of Punjab, in order to denote the plan status of the programmes under the minor head, the minor head code is followed by one of the following 2-character alpha codes33:

 CC: Centrally Sponsored (Committed)  CM: Central Sector (Committed)  CN: Central Sector (New Schemes)  CO: Central Sector (New Schemes-Committed)  CS: Centrally Sponsored (New Schemes)  CT: Centrally Sponsored (New Schemes-Committed)  ND: Non-Plan (Developmental)  NP: Non-Plan  SN: State Plan (Ninth Plan - Committed)  SP: State Plan (Annual Plan & Eleventh/Twelfth Plan)  SS: State Plan (Supplement Plan)  ST: State Plan ( Tenth Plan - Committed) The above alpha code is followed by the following three tiers of classification:

4. Sub Head/ Scheme Head (2 digit code): Scheme head denotes or identifies the schemes undertaken in pursuance of programmes represented by the minor head.

32 Source: Budget Manual, Ministry of Finance, Government of India, September 2010 33 Source: Budget Publication No. 10- Key to Budget Documents, Department of Finance, GoP

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5. Detailed Head (2 digit code): Detailed head represents the economic nature of an expenditure under various schemes, for e.g. salaries, wages, etc.

The detailed head code is followed by a 1 character code- ‘C’ or ‘V’ denoting whether the expenditure is ‘charged’ or ‘voted’. Thus, every line item under the state government’s budget has a 17-digit composite code.

6. Object head (2 digit code): In case of some detailed heads, a 2-digit object head is used to denote the exact item of expenditure, e.g. under the detailed head for salaries (01) the object heads used are basic pay (01), house rent allowance (03), etc.

Department of Health and Family Welfare: Definition of some of the important major and sub-major heads under the Department of Health and Family Welfare (DoH&FW), GoP is presented in the below table.

Table 96: Definition of major and sub major heads under DoH&FW budget

Code Category Code Definition

Major Head 2210 Medical and Public Health Under which Sub Major Head 01 Urban Health Services- Allopathy 02 Urban Health Services- Other Systems of Medicine 03 Rural Health Services- Allopathy 04 Rural Health Services- Other Systems of Medicine 05 Medical Education, Training and Research 06 Public Health 80 General Major Head 2211 Family Welfare Under which Sub Major Head 00 - Major Head 2236 Nutrition Under which Sub Major Head 02 Distribution of nutritious food and beverages Major Head 2250 Other Social Services Under which Sub Major Head 80 General Major Head 2251 Secretariat- Social Services Under which Sub Major Head 00 - Major Head 2515 Other Rural Development Programmes Under which Sub Major Head 00 - Major Head 2551 Hill Areas Under which Sub Major Head 60 Other Hill Areas Major Head 4210 Capital Outlay on Medical and Public Health Under which Sub Major Head 01 Urban Health Services 02 Rural Health Services 03 Medical Education, Training and Research 04 Public Health 80 General Source: Budget Publication No. 10- Key to Budget Documents, Department of Finance, GoP Note: Major heads under which no sub major head exists, a code of ‘00’ has been allotted

Table 97 presents the definition of various detailed heads under the budget of DoH&FW.

Table 97: Definition of detailed heads under DoH&FW budget

Code Definition of detailed head Code Definition of detailed head

01 Salaries 27 Minor Works / Maintenance

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Code Definition of detailed head Code Definition of detailed head

02 Wages 28 Payment of Professional and Special Services 04 Pension/Gratuities 31 Grants-in-Aid -General 05 Rewards 32 Contributions 07 Medical Reimbursements 33 Subsidies 08 Helper for Mid-Day Meal Scheme 34 Scholarships and Stipends 10 Office Expenses 35 Grants for creation of Capital Assets 11 Travel Expenses 41 Secret Service Expenditure 12 Medical Reimbursements 43 Suspense 13 Office Expenses 45 Interest / Dividend 14 Rent, Rates and Taxes 50 Other Charges 15 Royalties 51 Motor Vehicles 16 Publications 52 Machinery and Equipment/ Tools and Plants 19 Maintenance 53 Major Works / Land and Buildings 20 Other Administrative Expenses 54 Investment 21 Materials and Supplies / Stores and Equipments 55 Stock

22 Arms and Ammunition 70 Deduct Recoveries 24 P.O.L. (Police, Ambulance etc.) 75 Purchase 25 Clothing and Tentage (Police Uniform) 77 Computerisation 26 Advertisement and Publicity Expenses 98 Training

School Education Department: Definitions of some of the important major and sub-major heads under the School Education Department (SED), GoP, are presented in Table 98.

Table 98: Definition of major and sub-major heads under SED budget

Code Category Code Definition

Major Head 2202 General education Under which Sub Major Head 01 Elementary Education 02 Secondary Education 03 University and Higher Education 04 Adult Education 05 Language Development 80 General Major Head 2204 Sports and youth services Under which Sub Major Head 00 Major Head 4202 Capital Outlay on Education, Sports, Art and Culture Under which Sub Major Head 01 General Education Source: Budget Publication No. 10- Key to Budget Documents, Department of Finance, GoP Note: Major heads under which no sub major head exists, a code of ‘00’ has been allotted

Table 99 presents the definition of various detailed heads under the budget of SED.

Table 99: Definition of detailed heads under SED budget

Code Definition of detailed head Code Definition of detailed head

01 Salaries 27 Minor Works / Maintenance 02 Wages 28 Payment of Professional and Special Services 04 Pension/Gratuities 31 Grants-in-Aid -General 05 Rewards 32 Contributions

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Code Definition of detailed head Code Definition of detailed head

07 Medical Reimbursements 33 Subsidies 08 Helper for Mid-Day Meal Scheme 34 Scholarships and Stipends 10 Office Expenses 35 Grants for creation of Capital Assets 11 Travel Expenses 41 Secret Service Expenditure 12 Medical Reimbursements under WBHS 2008 43 Suspense 13 Office Expenses 45 Interest / Dividend 14 Rent, Rates and Taxes 50 Other Charges 15 Royalties 51 Motor Vehicles 16 Publications 52 Machinery and Equipment/ Tools and Plants 19 Maintenance 53 Major Works / Land and Buildings 20 Other Administrative Expenses 54 Investment 21 Materials and Supplies / Stores and Equipment 55 Stock

22 Arms and Ammunition 70 Deduct Recoveries 24 P.O.L. (Police, Ambulance etc.) 75 Purchase 25 Clothing and Tentage (Police Uniform) 77 Computerisation 26 Advertisement and Publicity Expenses 98 Training

Public Works Department: Table 100: Definition of Major Head (MH), Sub Major Head (SMH) and MiH (Minor Head) under PWD budget

MH Particulars SMH Particulars MiH Particulars 001 Direction and Administration 80 General 800 Other expenditure 2059 Public Works 051 Construction 60 Other Buildings 053 Maintenance and Repairs 1 National Highways 337 Road Works 3054 Roads and Bridges 337 Road Works 3 State Highways 800 Other expenditure Capital Outlay on 4059 80 General 051 Construction Public Works 101 Permanent Bridges 337 Road Works 3 State Highways 789 Special Component Plan for Scheduled Castes Capital Outlay on 5054 800 Other Expenditure Roads and Bridges District and Other 337 Road Works 4 Roads 789 Special component Plan for Scheduled Castes 80 General 800 Other Expenditure

Table 101: Definition of detailed heads under PWD budget

Code Definition of detailed head Code Definition of detailed head 00 50 Other Charges 01 Salaries 52 Machinery And Equipment

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Code Definition of detailed head Code Definition of detailed head 02 Wages 53 Major Works 11 Domestic Travel Expenses 60 Other Capital Expenditure 13 Office Expenses 91 Medical Reimbursement 14 Rents, Rates, Taxes 92 Telephones 24 P.O.L. 93 Electricity Charges 27 Minor Works, Maintenance 94 Water Charges 42 Lump-Sum Provision

Power Department: Definition of some of the important major and minor heads under the Power Department, GoP is presented in Table 102.

Table 102: Definition of major and sub-major heads under Power Department budget

Code Category Code Definition

Major Head 2045 Other Taxes and Duties on Commodities and Services Under which Minor Head 103 Collection Charges-Electricity Duty 80 General Major Head 2401 Crop Husbandry Under which Minor Head 104 Agricultural Farms Major Head 2801 Power Under which Minor Head 101 Assistance to Electricity Board Source: Budget Publication No. 10- Key to Budget Documents, Department of Finance, GoP

Table 103 Table 99presents the definition of various detailed heads under the budget of Power.

Table 103: Definition of detailed heads under Power Department budget

Code Definition of detailed head Code Definition of detailed head

01 Salaries 27 Minor Works / Maintenance 02 Wages 28 Payment of Professional and Special Services 04 Pension/Gratuities 31 Grants-in-Aid -General 05 Rewards 32 Contributions 07 Medical Reimbursements 33 Subsidies 08 Helper for Mid-Day Meal Scheme 34 Scholarships and Stipends 10 Office Expenses 35 Grants for creation of Capital Assets 11 Travel Expenses 41 Secret Service Expenditure 12 Medical Reimbursements under WBHS 2008 43 Suspense 13 Office Expenses 45 Interest / Dividend 14 Rent, Rates and Taxes 50 Other Charges 15 Royalties 51 Motor Vehicles 16 Publications 52 Machinery and Equipment/ Tools and Plants 19 Maintenance 53 Major Works / Land and Buildings 20 Other Administrative Expenses 54 Investment 21 Materials and Supplies / Stores and Equipment 55 Stock

22 Arms and Ammunition 70 Deduct Recoveries 24 P.O.L. (Police, Ambulance etc.) 75 Purchase 25 Clothing and Tentage (Police Uniform) 77 Computerisation 26 Advertisement and Publicity Expenses 98 Training

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Annexure 3. List of Officials Met

Department of Health and Family Welfare: S.N. Name Designation

1 Dr. Sanjeev Hans Director, PHSC

2 Shri Bipan Sharma Finance Director, PHSC 3 Mr. Mahesh Accountant, PHSC 4 Dr. Shukhwinder Kaur Programme Officer, Mental Health

5 Mrs. Asha Garg Senior Assistant, Homeopathy

6 Mr. Neeraj Singhla CA, NHM 7 Mr. Rakesh Kumar Director, Ayurveda 8 Mrs. Rajni Bala DD, Planning

School Education Department:

S. No. Name Department

1. Dr. Gurmeet Singh (Nodal Officer) ASPD, SSA

2. Mr. Harbansh Singh Director-DPI, Elementary

3. Mr. Sudhir DPI Secondary Education

4. Mrs. Surekha Thakur ASPD (Planning), RMSA

5. Sh. M. S. Sarkaria Dy. SPD, RMSA

6. Smt. Harvinder Kaur AM (MIS) RMSA

7. Mr. Jagtar Singh Dy, Director, PICTES

8. Ms. Nalni Sharma OSD, Scholarship

9. Maj. Gen. K.A.S. Bhullar (Retd.) Director, Meritorious School

10 Mr. Surrender Pal Singh Dy. Director, RMSA

11. Mr. Harvinder Kaur Asst. director Vocational Education

12. Mr. Baljinder Singh Advisor, Technical Education

13. Mr. Rajeev Sharma Deputy SPD, EDUSAT

14. Mr. Amartya Pal Studio Engineer, EDUSAT

15. Mr. Mahajan Dy. Director, SSA

16. Ms. Saloni Special Need Students

17. Mr. Rajveer Singh Deputy Manager (MIS)

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Public Works Department: S. No. Name Designation Department/ Section 1 Ms. Vimmi Bhullar Joint Secretary PWD 2 Mr. Parminder Jeet Singh Executive Engineer PWD (NH) 3 Mr. Gurmeet Singh Saro Executive Engineer PWD (Budget) 4 Mr. Anil Garg Executive Engineer PWD (Plan Roads) 5 Mr. Jaspal Singh Executive Engineer PWD (Link Roads) 6 Ms. Depander Kaur Deputy Director Economic & Statistical Organization, Punjab

Power Department: S. No. Name Designation

1. Anurag Aggarwal Secretary Power

2. HS Chaudhary Financial Advisor

3 Aman Sharma CA PSPCL

4 J.K Vaid OSD Power

5 Mandeep Singh Technical Advisor PSPCL

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Thank you

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