Outstanding Debt of Punjab: Its Extent and Sustainability Dynamics

Punjab, at present, passing through a severe fiscal crisis – reflected in the rising amount of revenue deficit, fiscal deficit and outstanding debt. The study unrivalled the dynamics of rising public debt and its sustainability during the last one decade, i.e., 2011-12 to 2020-21. Its own revenue receipts are not enough to finance its committed expenditure – leading to an extraordinary situation of rising deficits and debt of the state. The statistical facts clearly established that Punjab is a debt stressed state and likely to fall into a debt trap, if no corrective measures are undertaken immediately. For this, state must adhere to the hard budget options – mobilizing additional revenues, improving tax buoyancy, rationalizing power subsidy and other freebees, enhancing administrative efficiency, reforming PSUs; expanding capital outlays, compressing non-productive expenditure, etc. to restore the fiscal health of Punjab.