Punjab’s outstanding debt set to cross Rs 1-lakh crore mark

“In spite of adverse circumstances,the state has been able to follow prudent debt management policy. The ratio of outstanding debt to GSDP would be 33.13 per cent with reserve funds,” Dhindsa said.

Stating that outstanding debt is not unique to Punjab,Dhindsa,during his budget speech,attributed it to long years of militancy,tax concessions to neighbouring states,rising commitment of state to welfare of poor and inadequate support from the Centre.

Citing names of Gujarat,Maharashtra,Haryana,Tamil Nadu and Karnataka —- the states he said had very high debts —- the Finance Minister said Punjab has been pleading its case for debt waiver forcefully with the Centre but it has not come despite the Thirteenth Finance Commission also pleading the case of Punjab,West Bengal and Kerala.

Later,addressing the mediapersons,Deputy Chief Minister Sukhbir Badal described the debt as progressive in nature as it shows that the state is spending on development.

Denying that it was being spent on servicing debt,Sukhbir said,“It is a productive debt and it is different from non-productive debt where you make payment salary out of borrowings…We have to make infrastructure such as roads and hospitals and our debt to GSDP ratio has come down drastically (in the past).

“Wrong perception has been created about the (Punjab’s) debt,” he said,while projecting the revenue deficit of 2013-14 at Rs 1,747 crore —- drastically down from Rs 4,758 crore as per revised estimates of 2012-13 —- an “aberration” he attributed to impact of pay commission liabilities.

“It will be 0.57 per cent of the GSDP against target of 0.6 per cent given by the finance commission which is the lowest-ever target given to the state,” he added.

For 2013-14,he pegged the fiscal deficit at Rs 9,258 crore,which,he said,conformed to the target of three per cent of GSDP.

Both Dhindsa and Sukhbir,however,could not explain the steep fall in revenue deficit target saying it would be met through better tax compliance,austerity measures and the impact of taxes such as one per cent VAT hike,CLU on marriage palaces,one per cent hike in stamp duty and regularisation of colonies.