At Rs 1.5 lakh cr, state’s debt up 100% in 4 yrs

Vishav Bharti

Tribune News Service

Chandigarh, March 22

Each resident of Punjab is under debt of Rs 55,314. That is the situation of public debt, which has more than doubled in the past four years. The fact has come to fore in a report “State Finances” for 2016-17, prepared by the Comptroller and Auditor General (CAG) and tabled in the Vidhan Sabha on Thursday.

According to the report, at the end of 2016-17, state’s debt stood at Rs 1,53,773 crore. On an average, the state has added a debt of Rs 20,000 crore every year. In 2012-13, the figure was Rs 71,211 crore.

When it comes to paying back loans, Punjab seems to be in a debt trap as the government has to pay Rs 7,000 crore within one year; Rs 28,000 crore over the next three years and around Rs 60,000 crore over the next five years. Even new loans are being raised to pay installments of previous loans. The state has to repay 57.26 per cent of its debt (Rs 87,880 crore) in the next seven years. “Thus, the state is heading towards a serious debt repayment position, especially when its major irrigation projects had accumulated losses of Rs 1,633.40 crore during 2012-17,” the CAG observed.

Around 63 per cent of the total amount, which the state borrowed in the past five years, was used to make repayment of loans.

The aim behind taking these loans was to create new assets. But the creation of new assets remained between 4-6 per cent of the total expenditure during 2012-17.

“The state needs to formulate a well thought out debt management strategy and step up resource mobilisation to ensure debt stability. Unless such efforts are made, the state would face serious debt servicing challenges, which could lead to a situation of a debt trap,” observed CAG.