Previous governments borrowed loans at a higher interest rate of 11% : Cheema

Naresh Sharma 

Chandigarh, March 26: Punjab is sinking under the burden of debt. The primary reason behind this rising debt is the heavy interest payments on loans taken by previous governments. A staggering Rs 1,53,000 crore has been spent solely on interest payments, with Rs 59,000 crore used to pay interest on past loans and Rs 46,200 crore allocated for repaying the principal amount. .

The government expects the total debt to rise to Rs 4,17,136 crore by the financial year 2025-26. For 2024-25, the estimated debt is Rs 3,82,934 crore.The government projects the effective debt for the same period to reach Rs 3,62,443 crore. In 2023-24, Punjab accumulated a debt of Rs 3,46,185 crore, and experts expect it to rise further in the coming years.

Punjab Ranks 15th in Per Capita Income

Punjab’s Finance Minister Harpal Singh Cheema stated that due to past governments, Punjab’s debt burden is increasing significantly. He pointed out that previous governments borrowed loans at a higher interest rate of 11%. In contrast, the current government has taken loans at a lower rate of 7%. The Punjab government is now actively repaying the loans that its predecessors borrowed.

Cheema further alleged that, over the last four decades, all political parties have continuously looted and severely damaged Punjab’s economy. However, he emphasized that, in contrast, the Bhagwant Mann-led government has been actively working to strengthen the state’s financial position. Consequently, as a direct outcome of these efforts, Punjab now ranks 15th in the country in terms of per capita income.

To boost development, the government has presented a Rs 2,36,080 crore budget. . The state’s Gross State Domestic Product (GSDP) has grown by 9% this year. It is expected to increase by 10% in FY 2025-26. Additionally, tax revenue has witnessed a 14% growth.

Punjab’s GSDP Grows 9%, Tax Revenue Up 14%

Cheema said that Punjab’s economy is on a strong growth trajectory. The Directorate of Statistics has provided Advanced Estimates. These estimates show an impressive 9% growth in the current year. As a result, the State’s Gross State Domestic Product (GSDP) at current prices has reached Rs 8,09,538 crore. Looking ahead, the momentum is expected to continue. The government projects the GSDP at current prices to expand by 10% in FY 2025-26.

Punjab’s Fiscal Health Improves, Tax Revenue Up 14%

Cheema said, “As promised in our first budget, we set out to restore Punjab’s deteriorating fiscal health. We inherited a fragile financial state. I am pleased to inform this House that we have fulfilled our commitment for the third consecutive year. The Punjab’s Own Tax Revenue 4 has recorded double-digit growth. It has risen by 14% as of February, 2025. 11. I propose a total Budget Expenditure of Rs 2,36,080 crore for FY 2025-26.

Cheema stated that the government expects the Effective Revenue Deficit to be 2.51% and the Fiscal Deficit to be 3.84% Moreover, these figures have shown significant improvement compared to previous estimates, clearly indicating that the state is steadily progressing on the path of fiscal consolidation.