Funds depleted Punjab is expected to pay Rs 36,068 crore for debt service in the current financial year, according to budget estimates. Of this amount, Rs 20,122 crore will be used for interest payments only, while the remaining Rs 15,946 crore will be used to repay debt, excluding advances on ways and means.
For the advances on ways and means, the state will pay Rs 20,000 crore which will be spent under capital expenditure. The state has a huge debt of Rs 2.63 lakh crore till the end of the last financial year, which stands at 45.88% of the state’s Gross Domestic Product (GSDP). By the end of the next financial year, the debt will increase and rise to Rs 2.84 crore. In addition, state agencies, councils and corporations have a debt of Rs 55,000 crore of which Rs 22,250 has been guaranteed by the state government.
To keep afloat, the government plans to earn Rs 55,050 crore from the debt receipts. These include market loans worth Rs 31,804 crore, central government loans and advances worth Rs 2,446 crore and ways and means advances worth Rs 20,000 crore .
The government has already taken out a loan of Rs 8,000 crore after coming to power. Finance Minister Harpal Singh Cheema said: “We took out a loan of Rs 8,000 crore after we took office. But we also achieved better recoveries than our predecessors in the first quarter of this fiscal year. We managed to repay Rs 10,500 crore. Additionally, we have deposited Rs 1,000 crore in the Consolidated Sinking Fund. We actually paid Rs 3,500 crore in total.
In addition, the State would also take out Market Loans worth Rs 31,804 crore, Center Loans and Advances worth Rs 2,446 crore and Ways and Means Advances worth Rs 20,000 crore. The GST compensation scheme is expected to end in June 2022, and based on trends from previous years, the state government would be looking at a big hole left in its finances to the tune of Rs 14,000-15,000 crore over the course of of the 2022-23 financial year, in accordance with the budget document.
Stating that the government has already launched revenue raising measures, the FM proposed a 17.08% increase in tax revenue, contributing Rs 95,378 crore to the public treasury.