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With debt of Rs 2.82L cr, incoming govt faces daunting task in Punjab

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3 years ago

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With a whopping public debt of Rs 2.82 lakh crore, the incoming government in one of the most fiscally stressed states, Punjab will be faced with the daunting task to usher in much-needed economic reforms as a major component of government earning and borrowing is meant for servicing debt rather than capital expenditure.

Twenty per cent of the annual budget is being spent only to pay the interest on the loans.

As per the latest findings of the Comptroller and Auditor General of India, the state’s financial crisis is set to worsen with the debt likely to reach Rs 3.73 lakh crore by 2024-25.

Government officials told IANS that the state’s debt has increased by Rs 1 lakh crore in the past five years under the current Congress government now led by Chief Minister Charanjit Singh Channi, largely owing to populism.

When this government took over the reins in 2017, it got the legacy of a Rs 2.08 lakh crore debt left by the decade-long rule of the Shiromani Akali Dal-BJP in the state.

An official familiar with the matter told IANS that political compulsions and populist announcements have been taking a huge toll on the state’s finances and this may surge the debt beyond the projected Rs 2.82 lakh crore.

Finance Minister Manpreet Badal in his last budget speech for this fiscal projected the total revenue receipts at Rs 95,257 crore. However, the state has never managed to achieve more than 80 per cent of its revenue target.

Also approximately 40 per cent of the state’s total estimated revenue receipts of Rs 95,257 crore for the current fiscal would go into debt servicing.

As per the budget estimates of an outlay of Rs 168,015 crore for 2021-22, the outstanding debt is likely to be Rs 273,703 crore in 2021-22, which is 45 per cent of the GSDP.

The total outstanding debt of the state as on March 31 is projected at Rs 252,880 crore, which is 42 per cent of the GSDP for 2020-21 and the outstanding debt is likely to be Rs 273,703 crore in 2021-22, which is 45 per cent of the GSDP.

Besides a major component of earnings and market borrowings go into debt servicing, the revenue goes into unproductive expenditure like disbursement of salaries, pensions and power subsidies for the farmers.

Also, say officials, the Covid-19 pandemic has caused a significant deterioration in public finances, adding to pre-existing strains. Also businesses in the state are reeling because of a sluggish economy and poor liquidity.

As per the recent memorandum by the state to the Centre for extending the Goods and Services Tax (GST) compensation, Punjab says being an agrarian economy it was deriving a significant portion of its revenue from the agriculture sector in the pre-GST era by imposition of tax on agricultural produce (mainly foodgrains).

This was realized in the form of the levy of Purchase Tax on agricultural produce at the rate of five per cent of the minimum support price (MSP) of produce collected from the purchaser of such produce.

In addition, an Infrastructure Development Fee at the rate of three per cent was also levied on purchase of foodgrains. The state collected Rs 3,094 crore in 2015-16 from the Purchase Tax and Infrastructure Development Fee alone, i.e. 16.55 per cent of its total tax revenue of Rs 18,692.89 crore during that year.

With the implementation of GST, both the Purchase Tax and Infrastructure Development Fee on foodgrains have been subsumed in the GST.

Since the GST is a destination-based tax and agricultural produce is largely exempted under it, Punjab has experienced a permanent loss of a significant portion of the state revenue.

However, the saving grace for the government is the first half of this fiscal with a hefty increase in revenue from the pre-Covid levels.

The GST revenue comprising state goods and services tax (SGST) and integrated goods and services tax from April to September of 2021 was Rs 7,851 crore, which is 67.55 per cent more than in the corresponding period of 2020, and 54 per cent more than in the pre-pandemic year of 2019-20.

But the area of concern for authorities now is ending GST compensation from the Centre on June 30, unless it is extended by the GST Council, leaving the state to fend for itself thereafter.

A report by the Group of Experts (GOE) led by noted economist Montek Singh Ahluwalia, set up by Chief Minister Amarinder Singh to revive Punjab’s economy, recommended measures like reducing average cost of government debt, banning recruitment in police and bringing pay scales of government employees on par, among others.

The panel in its report to aid medium and long-term revival strategy was categorically clear that unless measures are taken to correct the fiscal situation over the next few years, it will not be possible to achieve the objective of restoring Punjab to its pre-eminent position.

The experts suggested rationalisation of power subsidies given to farmers that is 1.9 per cent of its GDP and grew from Rs 5,670 crore in 2019-20 to Rs 7,180 in 2020-21.

Ahead of the polling for the Assembly elections on February 20, the opposition Aam Aadmi Party (AAP) had accused the previous Akali-BJP and current Congress government of plunging Punjab into debt.

“With the population of 3 crore, today every individual in Punjab has a debt of Rs 1 lakh. Every child who is born in Punjab already has a debt of 1 lakh rupees on them right after their birth,” AAP leader Raghav Chadha told the media.

SAD President Sukhbir Badal, the man known for micro poll management for his now own controlled century old party with the focus on farmers’ interests and justice for them, said Punjab and Punjabis are in a crisis.

“The Congress government did nothing for five years. It reneged on each and every promise made to the people be it complete farm loan waiver, Rs 2,500 per month unemployment allowance, jobs for each household and increase in social welfare benefits.

“It also stalled all development work but simultaneously presided over a sand and liquor mafia and looted the state exchequer. It was due to this that the state’s debt has increased by Rs 1 lakh crore in the last five years alone.”

All the parties were banking on freebies to woo the electorate.

The AAP has promised Rs 1,000 for all women, while the Congress has assured Rs 1,100 per month for needy women. The SAD-BSP alliance has promised Rs 2,000 per month to all women heads of BPL families.

Two-time Chief Minister and former Congress leader Amarinder Singh in his election campaignin stressed Punjab “needs the Centre’s support for its economic revival, which his party, the Punjab Lok Congress, in alliance with the BJP would help achieve.”

The state has no money for development, which will remain a far cry under the false promises of parties like the Congress, AAP and SAD, who were not willing to work in coordination with the Centre, he stressed.

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Indian Railways Introduces Discounted ‘Round Trip Package’ To Ease Festive Season Travel

Published

1 week ago

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August 9, 2025

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New Delhi: To avoid rush by ensuring hassle-free ticket booking experience during the upcoming peak festive seasons, the Ministry of Railways on Saturday said that it has decided to formulate a ‘Round Trip Package’ on discounted fare and rebates benefit.

The move will facilitate passengers and redistribute the peak traffic for a larger range during peak festival seasons and ensure both sides utilisation of trains, including special trains.

“It has been decided to formulate an experimental scheme named as Round Trip Package for festival rush on discounted fare,” the Railways Ministry stated.

According to the ministry, the scheme will be applicable for those passengers who choose their return journey during the prescribed period.

Under this scheme, rebates shall be applicable when booked for both the onward and return journey for the same set of passengers.

Passenger details of the return journey will be the same as those of the onward journey. Passengers can book their tickets from August 14 for the advance reservation period (ARP) date of October 13.

“An onward ticket shall be booked first for the train start date between 13th October 2025 and 26th October 2025, and subsequently return journey ticket shall be booked by using the connecting journey feature for the train start date between 17th November and 1st December 2025,” the Ministry stated.

However, advance reservation period will not be applicable for booking of return journey.

Other conditions to avail the benefits of the railway’s new special scheme are the booking shall be permissible only for confirmed tickets in both directions, total rebates of 20 per cent shall be granted on base fare of return journey only, booking under this scheme shall be for the same class and same O-D pair for both onward and return journey.

According to Railways, no refund of fare shall be permissible for the tickets booked under this scheme.

This scheme shall be allowed for all classes and in all trains, including special trains (Trains on demand), except trains having Flexi fare.

In addition, no modification will be allowed on these tickets in either of the journeys, and there will be no discounts, Rail travel coupons, Voucher-based bookings, or Passes be admissible during return journey booking on concessional fare.

Passenger can book their ticket via both online and offline modes; however, both onward and return journey tickets must be booked using the same mode (online or offline).

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Business

Sensex crosses 81,000 Mark, Nifty Jumps 157 Points On Strong Metal & Auto Stocks

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2 weeks ago

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August 4, 2025

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Mumbai: The Indian stock market ended Monday on a strong note, with the BSE Sensex rising 418.81 points (0.52%) to close at 81,018.72, crossing the key 81,000 mark. During the day, it touched a high of 81,093.19. The NSE Nifty also surged by 157.40 points (0.64%) to end at 24,722.75, after hitting an intraday high of 24,734.65.

Top gainers and losers

Among major gainers on the Sensex were Tata Steel, BEL, Adani Ports, TCS, Tech Mahindra, Bharti Airtel, HCL Tech, Trent, M&M, Reliance Industries, UltraTech Cement and L&T.

On the flip side, Power Grid, HDFC Bank, ICICI Bank, and Hindustan Unilever ended the session with losses.

Why the market rallied

The market’s rally was mainly driven by strong performances in the metal and auto sectors. According to experts, a weakening US dollar, strong auto sales, and positive Q1 results from key companies helped boost investor confidence.

Vinod Nair, Head of Research at Geojit Financial Services, said,

“Consumption-driven companies are showing recovery in volume demand. Also, weak US job data may lead to interest rate cuts by the Federal Reserve.”

Global cues positive

Asian markets mostly ended in the green with Hong Kong, South Korea, and China posting gains. However, Japan’s Nikkei closed in red.

European markets were trading positively, while US markets had ended lower on Friday.

Oil prices also slipped, with Brent crude falling 1.15% to USD 68.87 per barrel.

Meanwhile, Foreign Institutional Investors (FIIs) sold shares worth Rs 3,366.40 crore on Friday, as per exchange data.

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Business

India Lost ₹22,842 Crore To Cybercriminals & Fraudsters In 2024: DataLEADS

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2 weeks ago

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August 2, 2025

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India lost Rs 22,842 crore to cybercriminals and fraudsters in 2024, DataLEADS, a Delhi-based media and tech company, said in its report on widespread digital financial frauds in the country. The amount stolen by digital criminals and fraudsters last year was nearly three times more than the Rs 7,465 crore in 2023 and almost 10 times more than the Rs 2,306 in 2022, DataLEADS said in ‘Contours of Cybercrime: Persistent and Emerging Risk of Online Financial Frauds and Deepfakes in India.

Prediction For Cyber-Crime Frauds

The Indian Cybercrime Coordination Centre, I4C, a federal agency that liaises between state and central law enforcement, predicts Indians will lose over Rs 1.2 lakh crore this year. The number of cybercrime complaints has spiked similarly; nearly twenty lakh were reported in 2024, up from around 15.6 lakh the year before and ten times more than were logged in 2019.

The surge in the number of cybercrime complaints and the volume of money lost points to one inescapable conclusion – India’s digital crooks are getting smarter and more efficient, and, in a country with a staggering nearly 290 lakh unemployed people, their ranks are increasing.

Bank-related frauds have increased dramatically; the Reserve Bank of India reported a nearly eightfold jump in the first half of FY 2025/26 compared to the same period last year. And the amount of money lost was staggering – Rs 2,623 crore to Rs 21,367 crore. Private sector banks accounted for nearly 60 per cent of all such incidents. But it was customers in public sector banks who were worst-hit; they lost Rs 25,667 crore in all.

Why have these numbers jumped so much over the past three years?

Because of the increased use of digital payment modes – i.e., smartphone-enabled services like Paytm and PhonePe – and the sharing and processing of financial details online – via (what many believe are encrypted and fail-safe) messaging platforms like WhatsApp and Telegram.

Federal data says there were over 190 lakh UPI, or unified payment interface, transactions in June 2025 alone, and these were worth a combined Rs 24.03 lakh crore. Digital payments’ value has grown from roughly Rs 162 crore in 2013 to Rs 18,120.82 crore in January 2025, and India accounts for nearly half of all such payments worldwide.

COVID-19

Much of this increase can be attributed to the pandemic and the subsequent lockdowns.

During COVID-19, the government pushed for a switch to UPI apps like Paytm to ensure social distancing and minimise contact with currency notes, via which the virus could be transmitted.

Digital Payment Tools In Rural Areas

The government also reasoned that digital payment tools would ensure greater penetration of financial services, particularly in rural areas. By 2019, India already had 440 million smartphone users and data rates were among the cheapest in the world – 1 GB cost Rs 200, or less than $3.

Insurance sector scams were also common. These included life, health, vehicle, and general, and are becoming an increasingly lucrative option for cybercriminals, particularly as insurance companies urge customers to opt for app-based services.

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