Chandigarh: As the Punjab Vidhan Sabha convenes on a rare Sunday to mark International Women’s Day, the fiscal prudence of the AAP govt will be under the lens during the presentation of the state budget for 2026-27.The financial roadmap is expected to be a tightrope walk as the ruling party is likely to fulfil its much-hyped pending poll guarantee of a Rs 1,000 monthly allowance for women, while simultaneously trying to stabilise a treasury burdened by heavy subsidy commitments and legacy liabilities.When finance minister Harpal Singh Cheema presents the budget on Sunday, which coincides with International Women’s Day, the state’s debt trajectory will be the central point of scrutiny, having more than trebled over the last decade. Since the AAP govt assumed office in March 2022 with a legacy debt of roughly Rs 2.83 lakh crore, the total outstanding liability has grown to a projected Rs 4.17 lakh crore by the end of the current fiscal year.“This absolute increase in debt of over Rs 1.3 lakh crore in four years highlights a persistent reliance on borrowing, even as the govt argues that 85% of new loans are utilised to service interest and principal on legacy debt,” said a retired professor of economics.Fiscal stability is further challenged by a revenue deficit that was projected at Rs 23,957 crore (2.7% of the GSDP) in the last budget. Bridging this gap remains difficult due to the state’s massive subsidy burden, which includes the cost of free agricultural power and the 300 units of free domestic power for nearly 90% of households. While the combined power subsidy bill has historically hovered around Rs 20,000 crore, the downward revision in tariffs by the state power regulator on Friday is expected to provide a fiscal windfall. The reduction in the average cost of supply could lower the govt’s subsidy reimbursement liability to approximately Rs 15,200 crore, potentially creating the fiscal headroom needed for the women’s stipend.Meanwhile, a universal rollout of the Rs 1,000 monthly allowance for the state’s 1.07 crore women voters is estimated to cost nearly Rs 12,840 crore annually. The fifth budget of the AAP govt is likely to define the political narrative ahead of the 2027 assembly elections. So far, the AAP govt has refrained from imposing any new taxes in the last four budgets.Last week, Cheema claimed that the AAP govt managed to reduce the debt-to-GSDP ratio from 48.25% in 2022 to 44.47%. He said the state was still trapped in “legacy debt”, revealing that 85% of all new borrowings — comprising 35% for principal and 50% for interest — were being consumed just to service loans taken by previous regimes, leaving less than 15% for actual development. He countered opposition criticism by noting that the state’s own tax revenue surged to Rs 57,919 crore and excise collections increased by nearly 87% in less than four years.The state also increased its buffer funds, with reserves in the Consolidated Sinking Fund growing from Rs 3,027 crore in 2022 to over Rs 10,700 crore by late 2025, he added.MOUNTING DEBT (BOX)• March 2022 (Inherited Debt): Rs 2.83 lakh crore• March 2026 (Projected Debt): Expected to reach Rs 4.17 lakh crore.• Total Increase: Rs 1.34 lakh crore over the 4-year period.AAP GOVT’S CLAIMS• The state’s own tax revenue jumped from Rs 37,327 crore (6.39% of GSDP) in 2021-22 to Rs 57,919 crore (7.15% of GSDP) in 2024-25• Excise collections saw an 86.77% growth in less than 4 years• State GST revenue is projected to surpass ₹26,500 crore in 2025-26 (up from ₹15,542 crore in 2021-22) MSID:: 129220651 413 |
