Punjab's debt burden swells by Rs 2.21 lakh crore in 15 years

Tribune News Service

Ruchika M Khanna
Chandigarh, April 18

Punjab’s public debt is burgeoning at its seams. The state has landed in a financial soup owing to successive governments’ sole emphasis on populism and their inability to increase revenue. A month after the AAP government took over, Chief Minister Bhagwant Mann has now ordered an inquiry into how and where the amount has been spent.

Mann today said successive governments have left the state with a debt of Rs 3 lakh crore. “We will inquire as to where the money was spent and order recovery into where this money was spent. This was public money,” he said.

Inquiries by The Tribune have revealed between April 2021 and February 2022, the previous government had already borrowed Rs 19,393.86 crore. If added to the previous years’ debt of Rs 2.48 lakh crore, the burden would be Rs 2.67 lakh crore. The government is also learnt to have borrowed from the market and raised state development loans in March, which would lead to the state’s debt zooming to over Rs 2.73 lakh crore (excluding the loans received in lieu of GST compensation).

Over 21 per cent of the state’s annual revenue receipts in 2021-22 have gone into just repayment of the outstanding loan and another 36.9 per cent into payment of salaries and pensions. A look at the past fiscal reveals the state is borrowing double of what it uses as money to repay interests on loan. This means other than borrowing to repay outstanding loans, more loans are being taken to meet the committed liabilities.

For years now, no new taxes have been imposed in the state in its Budget, barring a professional tax that was imposed by the previous government. The “emphasis” has only been on mopping up resources by checking system leakages, which clearly hasn’t worked. Though some cesses on retail fuels have been imposed, these were always rolled back in the run-up to the state elections. This practically leaves very little for the state for development and providing social security to marginalised sections.

During the previous government tenure, the state’s public debt rose from Rs 1.82 lakh crore (as on March 2017) to Rs 2.73 lakh crore — a whopping increase of Rs 91,000 crore.

Little wonder that Punjab is amongst the most debt-stressed states in the country, with its debt to GSDP ratio being 45.05 per cent. Official sources say the previous government has left an “inheritance of loss” for the AAP government in the shape of Rs 8,500 crore as unpaid power subsidy, Rs 1,700 crore as subsidy for reducing the power tariff to Rs 3 per unit (for those having up to 7 KW load); Rs 1,500 crore compensation to PSPCL against waiver of consumers’ dues and Rs 600 crore for waiving power tariff dues from the Water Supply Department.

The Congress is not the only ruling party that has added to the almost unsustainable debt burden of the state. In the previous 10 years of the Akali-BJP rule (2007-2017), Punjab’s debt rose from Rs 51,153 crore to Rs 1.82 lakh crore.

Probe welcome

We are all for a free and fair probe but it should not be used as an excuse to delay fulfilment of promises made to people. — Daljit Cheema, SAD leader

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