The Punjab government has successfully raised Rs 2,500 crore through the sale of state government securities (SGS) to finance capital expenditure and development schemes. This move has triggered sharp criticism from opposition parties, who have raised concerns over the state's escalating debt burden.
Details of the Borrowing
According to the Reserve Bank of India's (RBI) auction results issued on Tuesday, Punjab raised the amount in three tranches. The first tranche of Rs 700 crore was raised through the reissue of 7.84% Punjab SGS 2038. The second tranche of Rs 800 crore was raised through 15-year Punjab SGS 2041. The third and largest tranche of Rs 1,000 crore was raised through 18-year Punjab SGS 2044. The RBI auction results indicated that Punjab SGS 2038 carried a weighted average yield of 7.92%, while Punjab SGS 2041 and Punjab SGS 2044 both carried a weighted average yield of 7.91% and 7.92%, respectively.
Government's Justification
The state government stated that these borrowings would finance plan and development schemes currently under execution. It also confirmed that the Centre's consent had been obtained under Article 293(3) of the Constitution, which governs the borrowing powers of states.
Opposition's Reaction
The move drew sharp reactions from opposition parties. Punjab Congress chief Amarinder Singh Raja Warring questioned the government's fiscal management and alleged that employees were still awaiting dearness allowance and other dues despite repeated borrowings. 'Another Rs 2,500 crore loan added to Punjab's burden… If the government is continuously taking loans, where is the money going?' Warring said in a post on X.
Shiromani Akali Dal (SAD) leader Bikram Singh Majithia also attacked the Aam Aadmi Party (AAP) government, alleging that Punjab was being burdened with debt to fund 'extravagant spending'. He further accused the government of mismanaging the state's finances.
Previous Borrowing
On April 21, the Punjab government had also notified the sale of 12-year securities worth Rs 1,300 crore for financing development expenditure. This latest borrowing adds to the state's growing debt, which has become a point of contention between the ruling party and the opposition.
