Tax collection a booster for Punjab, rising debt a concern

Ruchika M Khanna

Chandigarh, January 31

Even as higher Goods and Services Tax and Excise duty collections have given a fillip to the state’s revenue receipts in the first three quarters of the fiscal, the burgeoning debt is a cause for concern.

The just-released fiscal indicators of the first three quarters of 2023-24 (April to December) reveal that the government had borrowed Rs 26,317 crore during the period. In the last financial year (2022-23), the total borrowings by the state government were to the tune of Rs 30,899 crore. Thus, the debt between April 2022 and December 2023 — since the AAP government has taken over — had increased by Rs 57,217 crore, taking the state’s total debt to Rs 3.20 lakh crore.

Areas of concern

• Revenue deficit soars to Rs 23,262 crore
• State government has borrowed Rs 26,317 crore between April – December 23
• Since April 2022, Rs 57,217 crore added to the state’s already burgeoning debt
• Rs 14,069 crore spent on payment of interest for loans taken so far this year

In order to service this debt, the government had spent Rs 31,153 crore as interest in the past 21 months (Rs 17,083 crore in 2022-23 and Rs 14,069.34 crore between April and December 2023).

Punjab’s revenue deficit had soared to Rs 23,262 crore in nine months of the ongoing financial year against the targeted deficit of Rs 24,588 crore for the whole year. This has sent the alarm bells ringing as the revenue deficit can overshoot the target for the entire year, with three months still to go for the end of the 2023-24 fiscal.

A closer look at the indicators reveals that though the total revenue receipt collections had improved over last year, 63.68 per cent of the target of Rs 98,852 crore could be achieved in first nine months of ongoing fiscal. These receipts were up by Rs 2,852.68 crore at Rs 62,948 crore over the revenue receipts collected between April and December 2022.

What had helped the state increase its receipts was the higher excise collections, stamp duty collections, non-tax revenue and the state’s share from the Union taxes. However, the grants-in-aid and contribution received from the Centre were down by Rs 6,065.92 crore from the corresponding period of last fiscal.

Contributors

What had helped the state increase its receipts was higher excise collection, stamp duty collection and non-tax revenue