Punjab CM writes to guv on borrowings, says 'mammoth' amount spent on interest on debts inherited

Punjab Chief Minister Bhagwant Mann Tuesday wrote to Governor Banwarilal Purohit over the issue of borrowings by his government, saying that a ”mammoth” amount of Rs 27,000 crore went into repaying interest on debts that were inherited.

Responding to a letter from the governor, Mann wrote that his government borrowed around Rs 47,000 crore — Rs 32,447 crore in 2022-23 and Rs 14,660 crore from April to August 2023.

”A mammoth amount of Rs 27,016 crore went into interest repayment on the debt which your government inherited,” he said, sharing the data on the funds spent out of the borrowings.

”During my tenure as chief minister of Punjab, lingering issues left behind by previous governments were dealt with on priority… We used both debt and our own revenue resources to fund organisations or schemes ignored by my predecessors, utilised the new debt to create capital assets and undertake development activities in the state,” Mann wrote.

Last month, Mann had urged the governor to take up the issue of the pending Rural Development Fund (RDF) amounting to Rs 5,637.40 crore with the president and the prime minister.

In his reply, Purohit had said he learnt that the debt of Punjab rose by about Rs 50,000 crore during the AAP regime and sought details of utilisation of this ”huge amount” so that he could convince the prime minister that the money was properly utilised.

Speaking to reporters in Chamkaur Sahib in Rupnagar district on Tuesday, Mann said he has given an account of each penny spent to the governor.

In his latest missive to the governor, Mann said he was grateful that Purohit sought the information which allowed him to put many things in perspective.

Stating that his government was working round-the-clock to mobilise additional resources for the state, Mann shared that the state recorded an increase in revenue from goods and services tax, excise, taxes on vehicles and stamps and registration in 2022-23.

Mann expressed hope that the information he shared with the governor puts into perspective the challenges faced by his government due to the legacy debt burden.

”I believe that you would be in a position to convince the prime minister that not only the debt has been properly utilised but all-out efforts are being made to consolidate the State finances. All this has been done while providing employment to more than 36,000 youths in the state,” he said.

”With Punjab’s interests in mind, I would also urge you to convince the prime minister to not only release the pending RDF but also accord a moratorium on debt repayment of the state for at least five years.

”This will provide much-needed relief to the strained financial position of the state and would give some fiscal elbow room to your government to accelerate the growth of revenue and the pace of development,” the chief minister added.