Punjab’s public debt is expected to exceed ₹4 lakh crore by the end of March 2026. This means the state will add ₹1.33 lakh crore to its debt during the four-year rule of the Aam Aadmi Party (AAP).
When AAP took power in March 2022, Punjab’s debt was ₹2.83 lakh crore. This year alone, the state will borrow ₹49,900 crore but will have to repay ₹18,198.89 crore. Another ₹24,995.49 crore will be spent on interest payments and debt servicing. This means that 86% of the new loan will go toward repaying old debts and interest.
Despite the rising debt, the state government insists the situation is under control. Outgoing Finance Secretary Ajoy Kumar Sinha said that in the past three years, Punjab has borrowed ₹1.32 lakh crore but also repaid ₹1.05 lakh crore. He added that the government is trying to reduce loan interest rates from 11-12% to 7%.
A report presented in Parliament showed Punjab’s debt-to-GSDP (Gross State Domestic Product) ratio is the second highest in India at 46.6%. However, the Punjab government claims it is lower at 44.77% and will reduce to 44.50% next year.
Finance Minister Harpal Singh Cheema said Punjab’s economy is growing, and the debt increase matches this growth. The state is working towards financial stability, with fiscal and revenue deficits expected to be 3.84% and 2.51%, respec
tively.
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