The Punjab chief minister had in September asked Governor Purohit to take up the issue of the pending Rural Development Fund, amounting to ₹5,637.40 crore, with the Centre. In his reply, the governor had sought details from the Mann dispensation about the utilisation of the ₹50,000 crore the state government had borrowed so that he could “convince the prime minister that the money was properly utilised”.

Mann in his letter said the Aam Aadmi Party government in the state had borrowed just over ₹47,107.6 crore– which includes not only market loans but also loans from NABARD–in its 18-month tenure and spent ₹48,530 crore.

Sharing the data on the funds spent out of the borrowings, the Mann government said it borrowed ₹32,447 crore in 2022-23 and ₹14,660 crore from April to August in this financial year. “A mammoth amount of ₹27,016 crore went into interest repayment on the debt which your government inherited.” 

The Punjab chief minister said that during his tenure, “lingering issues left behind by previous governments” were dealt on priority.

“We used both debt and our own revenue resources to fund organizations/schemes ignored by my predecessors, utilized the new debt to create capital assets and undertake development activities in the State,” Mann letter read.

Legecy Debts

Mann wrote his government spent ₹350 crore to bailout to PUNSUP, ₹798 crore to bail out Punjab’s Cooperative Bank, ₹845 crore on repayment of loan against Rural Development Fund, ₹2,556 crore on Power subsidy arrears, ₹4,000 crore on sinking fund, ₹1,008 crore on arrears of sugarcane farmers, ₹1,750 crore on unpaid central sponsored schemes, ₹10,208 crore spent on development as capital expenditure and ₹27,026 crore on interest payment. 

Revenue Earned

As per the data shared given by Mann, his government recorded an increase in the revenue collection. These included a growth of ₹2,586 crore in GST in 2022-23 ( ₹18,128 crore ) compared to 2021-22 ( ₹15,542 crore) an increase of 16%, excise collections ( ₹8463 crore in 2022-23, compared to ₹6,157 crore in 2021-22) a 37% hike in collection. Vehicles tax collection went up by ₹315 crore –13% increase and on stamps and registration by ₹919 crore—a growth of 28% in the collection.

The chief minister further wrote “I am happy to share that your Government has invested in the sinking fund a total of ₹4,000 crore since April 1, 2022 while total accumulation by previous governments just stood at ₹2,988 crore. This fund is aimed at alleviating some of the debt pressure of the state in future.” 

“I hope that above information puts into perspective the challenges faced by your Government due to legacy debt burden and I believe that you would be in a position to convince the Hon’ble Prime Minister that not only the debt has been properly utilised but all-out efforts are being made to consolidate the State finances. All this has been done while providing employment to more than 36,000 youth,” he said

“I would also urge upon you to convince Hon’ble Prime Minister to not only release the pending RDF but also accord a moratorium on debt repayment of the State for at least 5 years. This will provide much needed relief to the strained financial position of the State and would give some fiscal elbow room to your government to accelerate the growth of revenue and the pace of development,” Mann added

“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!

Updated: 04 Oct 2023, 08:24 PM IST