Punjab Chief Minister Bhagwant Mann has taken steps to address the state’s fiscal challenges by sending an account of the money spent out of the debt raised to Governor Banwarilal Purohit. In his communication, Mann urged the Governor to use his influence to not only secure the release of the pending Rural Development Fund (RDF) but also request a moratorium on debt repayment for a minimum of five years from the Prime Minister.
Earlier in September, Mann had asked Governor Purohit to take up the issue of the pending Rural Development Fund, amounting to ₹5,637.40 crore, with the Central government. In response, the Governor had requested details from the Punjab government regarding the utilization of the ₹50,000 crore borrowed by the state government, aiming to ensure that the funds were properly utilized.
In his letter, Mann outlined that the Aam Aadmi Party (AAP) government in the state had borrowed just over ₹47,107.6 crore, which included market loans and loans from NABARD, during its 18-month tenure. He noted that the government had spent ₹48,530 crore from these borrowings.
Mann provided data on how the borrowed funds were allocated, emphasizing the responsible use of resources. The expenditures included addressing legacy debts, bailout funds for various organizations and schemes, power subsidy arrears, sinking fund contributions, sugarcane farmer arrears, unpaid central sponsored schemes, and capital expenditures for development, among others. Additionally, a significant portion of the borrowed funds went toward interest payments on inherited debt.
The Chief Minister highlighted that his government had utilized both borrowed funds and revenue resources to address lingering issues from previous administrations and undertake development activities in the state.
Mann also shared positive revenue collection figures, including growth in GST, excise collections, vehicle tax collections, and stamps and registration fees. He underlined that the government had allocated ₹4,000 crore to the sinking fund since April 1, 2022, to alleviate future debt pressures.
Mann requested Governor Purohit to convey to the Prime Minister that the borrowed funds had been appropriately utilized, and his government had made concerted efforts to strengthen the state’s finances. He urged the Prime Minister to consider granting a moratorium on debt repayment for a minimum of five years, providing fiscal relief and opportunities for accelerated revenue growth and development in the state. Mann emphasized that these efforts had been undertaken while providing employment opportunities to over 36,000 youth in Punjab.