Punjab to raise Rs 8,500-cr loan during July-Sept

The Punjab Government will raise a loan of Rs 8,500 crore in the second quarter of the ongoing fiscal year (July

to September).

The market borrowings to be undertaken by the state government have been approved by the Reserve Bank of India (RBI). According to information available with The Tribune, the cash-strapped government would raise a loan of Rs 2,000 crore in July, Rs 3,000 crore in August and Rs 3,500 crore in September.

After these borrowings, the total loan raised by state government during this fiscal year will go up to Rs 14,741. 92 crore. In April and May, the government had raised Rs 6,241.92-crore loans.

The state government targets to raise Rs 34,201.11-crore loans this year. By the end of March 2026, the state’s total debt is likely to touch Rs 4 lakh crore. This means that each Punjabi (considering the state population to be 3 crore) will have an average debt of Rs 1.33 lakh by the end of this fiscal year.

A senior functionary in the Finance Department told The Tribune that the borrowings were within the permissible limit set by the RBI. “We are raising loans at the lowest rate of interest prevailing in the market,” he added. Till March 2024, the state’s total outstanding debt stood at Rs 3.82 lakh crore, which is over 44 per cent of the Gross State Domestic Product (GSDP). Earlier this year, a report on debt-stressed states in the country, tabled in Parliament by Union Minister of State for Finance Pankaj Chaudhary, had expressed concern that Punjab’s debt-to-GSDP ratio was the second highest in the country. During the first two months of this fiscal year (April and May), the state’s revenue deficit was Rs 5,513.65 crore. The state received Rs 12,903. 04 crore in revenue receipts, while the revenue expenditure stood at Rs 18,416.69 crore.

Eminent economist RS Ghuman said though the borrowing by the state was within the permissible limit set by the RBI, keeping in view the heavy and unsustainable debt, the state needed to draw a roadmap to reduce its debt. “The state government must think of lowering the debt burden in the medium and long run. Only then will Punjab have money to spend on capital asset creation. As of now, the state’s investment-GDP ratio is much less than the national average, indicating serious investment deficiency in the state,” he said.

Top News