Chandigarh, Mar 11: Punjab will be raising an estimated debt of nearly Rs 50,000 crore and banking on another Rs 45,000 crore through ways and means advances, the state’s Finance Minister Harpal Cheema said Friday as he presented a Budget proposal of Rs 1.96 lakh crore for 2023-24.

 

 

 

The development could increase Punjab’s already alarming debt burden substantially. The “ways and means” are temporary advances given by the Reserve Bank of India (RBI) to the central and state governments to tide over any mismatch in receipts and payments. However, it’s usually an emergency provision to be used sparingly.

 

 

 

Tabling the Aam Aadmi Party government’s first full Budget, Cheema said his government would focus on agriculture, health, and education in the financial year 2024. This year’s budgetary allocation is 26 percent more than last year’s Rs 1.55 lakh crore. The Gross State Domestic Product (GSDP) for Punjab is estimated to grow to nearly Rs 7 lakh crore, he said, pegging the revenue deficit at 3.32 percent and the fiscal deficit at 4.98 percent. The Budget risks pushing Punjab’s outstanding debt to over Rs 3.47 lakh crore, or 46.8 percent of the state’s GSDP — more than the 15th Finance Commission’s recommended fiscal deficit limit. The state’s debt burden currently stands at Rs 3.12 lakh crore. In its recommendation for states in February 2021, the Commission suggested that the fiscal deficit limit should be 4 percent of GSDP in 2021-22, 3.5 percent in 2022-23, and 3 percent between 2023 and 2026. Such a high fiscal deficit could also push up Punjab’s already alarming debt burden, which currently works out to be Rs 1.09 lakh for each person in the state. The Budget comes days after the Comptroller and Auditor General of India (CAG) highlighted Punjab’s precarious financial situation — in a report on ‘State Finances’ for 2021-22 tabled in the assembly earlier this week, the CAG warned that the state’s debts could cross Rs 5 lakh crore by 2031. Opposition parties have criticized the Budget, not only for the burden that it puts on the state’s finances but also for the AAP government’s unfulfilled promises. At a post-Budget press conference, Leader of the Opposition Partap Singh Bajwa asked the AAP government what happened to the promises it made during last year’s assembly elections — such as giving Rs 1,000 a month to every woman in the state and increasing pension from the current Rs 1,200 to Rs 2,500. He wasn’t the only opposition leader to have faulted the Budget — Shiromani Akali Dal (SAD) working president Sukhbir Badal accused the Bhagwant Mann government of having played a “fraud” with Punjabis by fudging figures to paint a rosy picture.

 

Also Read: Canadian PR killed in Rupnagar during 'Hola Mohalla' 

 

“The state debt had increased by Rs 42,181 crore to touch Rs 3.47 lakh crore suggesting that Punjab was hurtling towards financial bankruptcy,” said Badal in a statement. “The very fact the fiscal deficit was pegged at Rs 34,784 crore meant that even the meager resources allocated for various departments and schemes were not likely to be released.” Bharatiya Janata Party (BJP) national spokesperson Jaiveer Shergill said the Budget did not show any new avenues of revenue. “A thorough perusal of the Budget shows that it actually puts Punjab in a reverse gear, with (chief minister) Bhagwant Mann sleeping on the steering wheel,” Shergill said in a statement. The government, meanwhile, conceded that some of its promises still remained unfulfilled and said that it remained committed to fulfilling all pending guarantees.