CHANDIGARH: The cash-strapped Aam Aadmi Party government in Punjab is expected to take a loan of Rs 49,900 crore this year, pushing public debt by the end of March next to a staggering Rs 4.17 lakh crore. Punjab is the second-most indebted state in the country in terms of debt to gross state domestic product ratio.Sources said of the loan amount, Rs 18,198.89 crore will go towards repaying old loans and Rs 24,995.49 crore for servicing legacy debt. That makes up 86 percent of fresh borrowing. By March 31, 2026, the total debt of Punjab will stand at Rs 4,17,136.10 crore, an approximate 9-percent increase from the current outstanding debt of Rs 3,82,934.98 crore.In 2024-25, the government paid Rs 23,953.72 crore as interest on the outstanding debt, 23 percent of total revenue receipts. Thus, interest liability has constantly been rising due to growing debt. The debt liability has increased by Rs 1 lakh crore in the past three years.When AAP came to power in March 2022, the total debt stood at Rs 2.83 lakh crore. In the last three years, the government raised loans worth Rs 1.32 lakh crore and paid back Rs 1.05 lakh crore—this includes Rs 46,200 crore towards the principal and Rs 59,000 crore as interest. Officials said while restructuring previous loans, the government is negotiating with the financial institutions to reduce the interest rate from 11-12 percent to a capped 7 percent.Data shared by Union Minister of State for Finance Pankaj Chaudhary in Parliament reveals that Punjab is the second-most indebted state in the country in terms of debt to GSDP ratio of 46.6 percent. Arunachal Pradesh is first with 57 percent, and Himachal Pradesh is third with 45.2 percent.
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