Amid mounting debt, Punjab CM Bhagwant Mann meets finance commission chief, seeks grant

“The CM had a fruitful meeting. A positive outcome is expected,” said a government officer. There were concerns freebies might come in the way of a grant by the Finance Commission, hence the CM decided to meet Panagariya and apprise him about the issues being faced by the state, the officer added that Himachal Pradesh’s recent decision to do away with the power subsidy for taxpayers also came after the Finance Commission visited the state. During his visit to the hill state, Panagariya had said, “The issue of freebies will also be addressed by the commission, as we are aware that freebies have proliferated, and there is a competition among the states and the political parties to give freebies.”

Mann met Panagariya in this backdrop.

Sources said Punjab had prepared a case that the state was grappling with a huge debt that started mounting since it began handling terrorism in the 1980s and was also fighting drugs and other issues.

According to officials, Mann has been working to provide the canal water supply to conserve underground water. The state has 14 lakh tube wells that pump water out of aquifers. Out of these, 9 lakh are in the Malwa region alone. The Punjab government has identified dependence on canal water as part of the solution to conserve groundwater. The government has been trying to ensure canal water supply reaches the tail end to do away with tube wells. Punjab gives free power to agriculture pump sets and also 300 units to domestic users, costing the state exchequer Rs 20,000 crore annually, they said.

On the other hand, Punjab has a revenue deficit of Rs 23,198 crore in the budget for the current fiscal. Last Financial Commission had given a revenue deficit grant of almost Rs 25,000 crore to the state. But, the state fears the commission’s questions over freebies this time, officials said.

According to officials, the state’s effective outstanding debt has reached Rs 3,53,599 crore, and the effective revenue deficit and fiscal deficit are expected to be 2.77 per cent and 3.80 per cent, respectively, by the end of this fiscal. The effective outstanding debt is set to reach Rs 3.5 lakh crore — 44.05 per cent of the Gross State Domestic Product (GSDP), they added.