Punjab’s debt is mounting and it will be a whopping Rs. 1.13 lakh crore by March 2015, according to finance minister Parminder Singh Dhindsa.
The huge outstanding debt of the border state is leading to heavy expenditure on debt servicing, leaving little resources for development. In 2012-13, the total debt servicing expenditure was Rs. 10,505 crore — Rs. 6,831 crore interest payment and Rs. 3,674 crore as repayment of loan.
As the state has been unable to fully achieve targets of revenue deficit as set out in the Fiscal Consolidation Path recommended by the 13th finance commission, the SAD-BJP government primarily blamed “historically high level of outstanding debt” for its fiscal woes.
The total outstanding debt, as per revised estimates of 201314, is over Rs. 1 lakh crore as on March 2014.
In his budget speech, which the opposition Congress also disrupted briefly, the finance minister said the major fiscal problems of Punjab were due to huge level of “outstanding debt” which is the result of prolonged years of militancy in the state. He also blamed the “consistent decline in the share of state in central taxes” as yet another cause of worry behind rising debt.
The finance minister said the state government on its own and without any major help from the central government in the past 10 years had made sincere efforts to keep its debt within manageable limits. “As a result of these efforts, the average ratio of outstanding debt to the GSDP declined from 46.32% during the 10th five year plan to 34.44% during the 11th five year plan,” Dhindsa said.
The outstanding debt of the state till March 2013 was Rs. 92,282 crore.
During this fiscal, the government will have to shell out Rs. 11,496 crore on total debt servicing, which includes Rs. 8,380 crore on interest payments and Rs. 3,116 crore on repayment of debt, excluding ways and means advance.