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Punjab’s debt-GSDP ratio falls by 4% to 44.47%, says Cheema
Punjab ranks among the top three states in revenue growth as its own tax collection jumps to ₹57,919 crore, says the finance minister
Punjab’s debt has touched the ₹4-lakh crore mark with a debt-to-Gross State Domestic Product (GSDP) ratio of 44.47%, finance and taxation minister Harpal Singh Cheema said on Tuesday.
Addressing a press conference on the Aam Aadmi Party (AAP) government’s fiscal performance just days before it completes four years in office on March 16, Cheema said the AAP government had inherited a legacy debt of approximately ₹3-lakh crore, because of which 35% of all new loans raised were utilised solely to clear the liabilities left by previous governments. He added that another 50% of the borrowings went toward paying interest on older loans, leaving less than 15% of the borrowed funds for the government to use for the state.
The finance minister, who is set to present his fifth and final budget of the current government on March 8, said that despite these constraints, the government had reduced the debt-GSDP ratio from 48.25% to 44.47%. However, despite this improvement, Punjab remains among the most indebted states in the country. By the end of the current financial year, the state debt is projected to touch ₹4.17 lakh crore.
‘Surge in own tax revenues’
On revenues, Cheema said the state had emerged among the top three states in the country for remarkable achievements in revenue growth. He said the state’s own tax revenue surged significantly, rising from ₹37,327 crore, which was 6.39% of the GSDP in 2021-22, to an impressive ₹57,919 crore, or 7.15% of the GSDP, in 2024-25.
He said that excise revenue had increased by 86.77% in less than four years. “During the five-year tenure of the SAD-BJP government, total excise collection was ₹20,545 crore, with an annual average of ₹4,109 crore. The subsequent Congress government collected ₹27,395 crore over five years, averaging ₹5,479 crore annually. In stark contrast, our government has already amassed ₹37,975 crore up to January 2026, achieving a staggering annual average of ₹9,907 crore,” he said, drawing a comparison with previous governments.
Furthermore, excise revenue in 2021-22 under the Congress regime was ₹6,157 crore, whereas it is expected to reach ₹11,500 crore in the financial year 2025-26, he said.
Cheema said that GST revenue, which was ₹15,542 crore in 2021-22, was projected to surpass ₹26,500 crore in 2025-2, whereas the previous Congress administration relied heavily on GST compensation and failed to take concrete steps to broaden the tax base. He said their five-year total stood at ₹61,286 crore, averaging ₹12,257 crore annually, whereas the present government had collected ₹83,739 crore up to January 2026, with an annual average of ₹21,845 crore.
‘Capex higher than previous govts’
Cheema said that the state government had given a boost to capital expenditure, spending more money on development of schools, roads, hospitals and sports stadiums than previous governments. He said the SAD-BJP government spent ₹14,641 crore between 2012 and 2016, and the Congress government ₹19,356 crore on capital expenditure during its term subsequently, while the AAP government would spend ₹31,630 crore. He said the government spent ₹2,566 crore to bail out financially distressed state entities like PUNSUP, Land Mortgage Bank, PSIDC and the Punjab Mandi Board.
Outlining long-term fiscal safeguards, Cheema said the AAP government made substantial investments in the Consolidated Sinking Fund and Guarantee Redemption Fund maintained with the RBI. As of March 31, 2022, the state had only ₹3,027 crore in the Consolidated Sinking Fund and nothing in the Guarantee Redemption Fund. “By December 2025, these reserves have swelled to ₹10,738 crore in the Consolidated Sinking Fund and ₹982 crore in the Guarantee Redemption Fund, bringing the total to ₹11,720 crore,” he said, adding: “this represents an overall increase of ₹8,693 crore, a staggering 287% growth in less than four years. This proactive investment acts as a buffer against any sudden financial crises and aids in systematically retiring state debt.”
Clarify if SYL a closed chapter: Cheema to Saini
As the construction of the Sutlej-Yamuna Link (SYL) Canal found no mention in the Haryana chief minister Nayab Singh Saini’s 76-page budget speech on Monday, Cheema said that the Haryana government deliberately kept it out of the budget in view of the assembly elections in Punjab next year.
“I understand they will clarify whether they have closed the SYL chapter. I think that before the honourable Supreme Court and in meetings of the committee of the two states (on SYL) they will give up their claim,” the Punjab finance minister said in response to a media query on the absence of any reference to the contentious canal in Saini’s budget speech in the Haryana Vidhan Sabha.
