AAP’s budget vision

THE Punjab Government’s Rs 2.36-lakh crore budget for 2025-26 reflects its commitment to addressing the state’s most pressing challenges — drug abuse and industrial stagnation. However, these reforms unfold against a backdrop of mounting financial distress, raising concerns about Punjab’s ability to sustain them. A significant

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Rs 5,598 crore allocation to healthcare, which includes the first-ever drug census, signals a proactive stance in the state’s fight against substance abuse. This aligns with Punjab’s ‘Yudh Nashian Virudh’ (war against drugs) campaign, which has made strides in tackling the crisis. In the industrial sector, Rs 250 crore in incentives and a Rs 200-crore relief package for struggling industrialists attempt to revive growth. These moves build on the Punjab Industrial and Business Development Policy 2022, designed to attract investment and stabilise the economy.

Yet, Punjab’s fiscal health tells a different story. The state is projected to borrow Rs 49,900 crore this year, pushing its outstanding debt to Rs 3.96 lakh crore. Alarmingly, Rs 24,995 crore — over 10 per cent of the budget — will be spent just on interest payments, leaving little fiscal space for development. Even with Rs 27,650 crore projected from GST and Rs 7,000 crore from stamp duty, revenue generation remains a major challenge. Meanwhile, the Rs 1,000 monthly grant for women, a key AAP poll promise, is conspicuously absent, raising concerns about electoral accountability.

The NITI Aayog’s Fiscal Health Index (FHI) 2022-23, released in January, underscores Punjab’s economic struggles, ranking it last among 18 major states due to poor revenue mobilisation, high non-development expenditure and excessive debt-servicing. While the government blames previous regimes, its own reliance on loans and declining capital expenditure raise doubts about long-term sustainability. AAP’s budget attempts to balance reform with welfare. But without addressing fiscal discipline, Punjab risks a deeper crisis. It is time for bold, structural changes — before debt overshadows development.