CHANDIGARH: The cash-strapped Aam Aadmi Party (AAP)-led Punjab government has decided to avail a loan of Rs 8,500 crore during the second quarter of the present fiscal - July to September.
With this, the total borrowings raised by the government during this fiscal year will touch Rs 14,741. 92 crore.
The opposition accused the government of pushing the state into financial ruin and warned that Punjab is on the brink of bankruptcy.
Sources said that the Reserve Bank of India (RBI) has approved the market borrowings to be availed by the state government.
The 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.
During April and May, the government availed loans to the tune of Rs 6,241.92-crore.
The government is mulling to raise Rs 34,201.11 crore loans this year. Thus, by the end of March 2026, the total debt of the state is likely to touch Rs 4 lakh crore.
Sources said that, till March last year, 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).
A report on debt-stressed states in the country, tabled in Parliament by Union Minister of State for Finance Pankaj Chaudhary had expressed concern on the debt-to-GSDP ratio of Punjab as it stated that it 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 and it received Rs 12,903. 04 crore in revenue receipts, while the revenue expenditure stood at Rs 18,416.69 crore.
"We are raising loans at the lowest rate of interest prevailing in the market as the borrowings were within the permissible limit set by the RBI,’’ said an officer on condition of anonymity.
Leader of the Opposition and senior congress leader Partap Singh Bajwa said, "The AAP government has drowned Punjab in debt over its three-year tenure. It now plans to borrow Rs 8,500 crore in the second quarter (July-September) of this fiscal year—Rs 2,000 crore in July, Rs 3,000 crore in August, and Rs 3,500 crore in September. This reckless borrowing shows no regard for the state’s financial health,” he said.
He pointed out that, Chief Minister Bhagwant Mann appointed former IMF senior economist Arbind Modi as Chief Advisor and former World Bank economist Sebastian James as Adviser (Fiscal Affairs) to revive Punjab’s struggling economy.
However, Bajwa questioned the effectiveness of these appointments, stating, “Is this the expertise that globally renowned economists are offering the AAP government? Even AAP leader Arvind Kejriwal, who often boasts about his revenue management skills, has failed to support Punjab in its hour of need.”
Bajwa noted that when AAP assumed power in 2022, Punjab’s outstanding debt stood at Rs 2,81,773 crore. By the end of the 2025-26 fiscal year, the debt is projected to reach Rs 4 lakh crore, with economists estimating it could climb to Rs 4,50,000 crore by 2026-27, the final year of AAP’s term.
"The people of Punjab will bear the burden of this massive debt through heavy taxation. The AAP government will vanish from Punjab long before the next assembly elections,” Bajwa claimed.