Punjab now second-most debt-ridden state
As Finance Minister Harpal Cheema gets ready to present the fourth Budget of the Aam Aadmi Party government on Wednesday, he will be presenting a rather grim picture of the state’s debt position, with Punjab now being the second-most debt-ridden state in the country.
By the end of this month, the state’s total liabilities are estimated at Rs 3,78,453 crore, according to the data shared by the Union Minister of State for Finance, Pankaj Chaudhary, in Parliament today. This data also revealed that the state’s debt to gross domestic product ratio stood at 46.6 per cent, which is the second highest, after Arunachal Pradesh.
Just two months ago, Punjab’s Fiscal Health Index score was found to be the lowest in the country at 10.7, according to the report on Fiscal Health index, released by the NITI Aayog.
Though Cheema would likely blame previous governments for fiscal woes, the fact remains that in the past three years, since AAP has come to power, Rs 95,000 crore has been added to the state’s debt.
At the end of March 2022, the state’s debt stood at Rs 2.92 lakh crore. Though the government officials argue that they are borrowing only according to what is allowed, 78 per cent of what the state raises as loans goes into just paying the interest on loans.
As a result, the state has very little money to spare for building infrastructure. From April 1, 2024, to February 28, the state has spent just Rs 5,818 crore as capital expenditure, of a total of Rs 1,09,961.67 crore spent by the state in 11 months of the ongoing financial year.
The state has already overshot the revenue deficit target and the fiscal deficit is almost double than what was targeted. Comparatively, the state’s revenue receipts are just 80.37 per cent of the targeted revenue of Rs 1,03,936.19 crore. The non-tax revenue earned in the first 11 months was just 50 per cent of the target.
Debt position
2021-22 Rs 2.83 lakh cr
2022-23 Rs 2.92 lakh cr
2023-24 Rs 3.23 lakh cr
*2024-25 Rs 3.78 lakh cr
(*Projected debt)
