Punjab debt goes up by over ₹47,000 crore, experts call for check on freebies 

Punjab's debt has risen to ₹47,000 cr in 1.5 yrs, prompting calls to rationalise freebies. CM Mann said ₹27,000 cr went to interest payments. RBI flagged debt at 50% of GDP & more than 4x revenue. Economists suggest road map to come out of crisis & mobilise resources. People have high expectations from AAP govt, but it has failed to rejuvenate economy.

Punjab has accumulated a debt of over ₹47,000 crore in the past a year and a half, prompting calls from economists to rationalise freebies amid lack of resources to make fresh capital investments as the State’s outstanding debt hovers over 50% of its GDP.

Chief Minister Bhagwant Mann, responding to a letter from Governor Banwarilal Purohit on Tuesday, said a “mammoth” amount of ₹27,000 crore went into paying interest on the debt that was inherited from the past regimes.

He said the State borrowed around ₹32,447 crore in 2022-23 and ₹14,660 crore from April to August 2023.

The CM’s reply came after the Governor last month sought details about the utilisation of the borrowed amount.

Since coming to power in Punjab last year, the Aam Aadmi Party (AAP) government has taken several populist measures, including free power up to 300 units per household and a financial assistance of ₹1,000 for every woman aged 18 or above.

Earlier in the year, the Reserve Bank of India had flagged that Punjab’s outstanding debt was more than 50% of its GDP and more than four times its revenue for the financial year 2022-23.

Expressing concern over the situation, economists said the government should prepare a road map to come out of the crisis.