The once-thriving state of Punjab finds itself entrenched in an economic quagmire, grappling with a financial crisis that has severely hampered its growth prospects. The recent plea by the Aam Aadmi Party (AAP) government for a five-year loan waiver reflects the dire straits the state’s economy currently faces. However, the narrative is marred by a disconcerting display of misplaced priorities and political posturing that exacerbate the existing woes.
Chief Minister Bhagwant Mann’s recent focus on welcoming AAP chief Kejriwal and procuring a new aircraft has raised eyebrows, especially when juxtaposed against the pressing economic challenges besieging Punjab. At a time when the state teeters on the brink of fiscal collapse, such actions project an unsettling disregard for the urgent needs of the populace.
According to a report on Punjab, which was once considered the most prosperous state of the country, the state currently has a debt of about ₹ 3.40 lakh crore. This debt is more than 50% of the total economy of Punjab. The total size of Punjab’s economy was approximately ₹6.29 lakh crore in 2022–23. There was a change of power in Punjab in 2022 and the Aam Aadmi Party government came to power.
The economic predicament plaguing Punjab did not materialize overnight; instead, it is the outcome of cumulative policy failures and mismanagement by successive governments. Both the Congress and AAP bear responsibility for steering the state toward its current dire economic state. While the Congress administration, in power since 2017, seemingly pushed the state economy into the intensive care unit, the AAP government’s policies are further pushing it toward reliance on life support.
One of the paramount concerns exacerbating Punjab’s economic woes is the exorbitant debt burden. A substantial portion of the state’s budget is consumed by servicing the interest on old loans, leaving minimal resources for essential public services and developmental initiatives. This financial straitjacket constrains the government’s ability to stimulate growth, invest in critical sectors, and alleviate the plight of its citizens.