For the first time, Punjab Chief Minister Bhagwant Mann, in response to a query from Punjab Governor Banwari Lal Purohit, has disclosed that the state government has accumulated a significant debt of Rs 47,107 crore since their tenure began. Remarkably, 57% of this debt has been allocated to paying off interest on the state’s outstanding liabilities.
Governor Purohit had requested details of the debt acquired by the Aam Aadmi Party (AAP) government following a letter from Congress leader Partap Singh Bajwa. In his three-page response to the Governor, CM Bhagwant Mann clarified that the state’s debt increased by Rs 47,107.6 crore between April 1, 2022, and August 31, 2023. This includes various forms of loans, such as market loans, NABARD loans, externally aided project loans, and long-term loans for capital asset creation. Out of this, Rs 32,447.11 crore was added during the 2022-23 fiscal year, and Rs 14,660.5 crore between April 1 and August 31, 2023. An astonishing Rs 27,016 crore went toward servicing interest on the inherited debt.
The Governor’s request for details on the utilization of the Rs 50,000 crore debt raised by the AAP government sparked criticism from the opposition, particularly the Congress, who accused the government of a lack of transparency and accountability in managing borrowed funds. Punjab already ranks among the most indebted states in the country, with an outstanding debt of Rs 2.82 lakh crore at the end of the 2021-22 financial year, projected to increase to Rs 3.47 lakh crore by March 31, 2024. CM Mann defended his government’s actions, emphasizing that they prioritized addressing lingering issues from previous administrations. They used both borrowed funds and their own revenue resources to support neglected organizations and programs, invested in capital assets and initiated development projects.
Mann assured his commitment to servicing the debt while mobilizing additional resources for development. He shared details of increased revenue receipts, which facilitated value-accretive investments and the settlement of arrears, including payments related to the sixth pay commission, UGC scales, power subsidies, and support for farmers. Mann hoped this information would shed light on the challenges faced by the government due to the legacy debt burden.
In conclusion, CM Mann urged Governor Purohit to advocate for the release of the pending Rural Development Fund (RDF) and suggested a moratorium on debt repayment for the state, extending for at least five years. This, he believed, would provide financial flexibility to accelerate revenue growth and development in Punjab.
The exchange of letters regarding this politically sensitive debt issue represents the latest dispute between Governor Purohit and CM Mann, who have clashed on several matters over the past year.
