Punjab's debt was ₹15,250 crore in 1996. Now it's ₹4.47 lakh crore: Manish Tewari sounds alarm
The Chandigarh MP blamed "populist and profligate spending" by successive governments over the last three decades and warned that Punjab "just can't afford freebies"
- Aug 6, 2026,
- Updated Aug 6, 2026 7:36 PM IST
Congress MP Manish Tewari on Thursday raised concerns over Punjab's worsening financial health. He said the state's debt has surged from ₹15,250 crore in 1996 to an estimated ₹4.47 lakh crore by the end of 2026-27.
The Chandigarh MP blamed "populist and profligate spending" by successive governments over the last three decades and warned that Punjab "just can't afford freebies."
Sharing a series of posts on X, Tewari said Punjab's debt stood at ₹15,250 crore in 1996 and doubled to ₹32,496 crore by 2002.
"The debt, therefore, is not militancy-related but a consequence of populist and profligate spending over the past 30 years by successive governments," he said.
According to Tewari, the state's debt is projected to touch ₹4.47 lakh crore by the end of the 2026-27 financial year.
Since the early 1990s, Punjab has alternated largely between the Shiromani Akali Dal-BJP alliance and the Congress. The Aam Aadmi Party came to power in 2022.
The Akali Dal-BJP alliance then governed from 1997 to 2002, followed by Congress under Amarinder Singh from 2002 to 2007. The Akali Dal-BJP coalition returned and completed two consecutive terms between 2007 and 2017 under Parkash Singh Badal.
Congress came back to power in 2017 under Amarinder Singh before leadership changes brought Charanjit Singh Channi to the chief minister's post. In 2022, the AAP won a sweeping mandate, and Bhagwant Mann became the chief minister.
Don't Miss: Ravneet Singh Bittu quits Union Cabinet, sets sights on state politics ahead of Punjab polls
'BORROWING TO PAY INTEREST'
The Congress MP said Punjab's finances have reached a point where borrowings are being used to service existing debt instead of funding development.
He said about 23% of the state's revenue receipts, amounting to ₹28,755 crore, will go towards interest payments. Debt servicing, including repayment of principal and interest, stood at ₹43,194 crore in 2025-26.
"In effect, the state is borrowing to pay interest on existing debt rather than spend on development," Tewari said.
SECOND-HIGHEST DEBT BURDEN
Tewari said Punjab's debt-to-GSDP ratio stood at 46.6% as of March 31, 2025, making it the second highest in the country. The consequence is that on May 31, 2025, Punjab had the second highest debt-to-GSDP ratio (46.6%) in the country - trumped only by Arunachal Pradesh at 57%, he added.
In another post, he warned: "Actually the situation is much worse."
He said in a reply to his Parliament question as of 31st March 2025, the debt-to-GSDP ratio of Punjab stands at 46.6%, "still the second-highest in the country."
Highlighting the pressure on the state's finances, Tewari said Punjab's annual debt servicing cost is around ₹42,481 crore. "This is more than 23% of the state revenues. It means for every one Rupee of revenue generation by Punjab, 23 Paisa go towards only debt servicing," he stated.
The Congress leader added that after meeting revenue expenditure and debt obligations, only about 5.6% is left for capital expenditure that creates long-term assets.
"What is then left for Capital Expenditure- development expenditure that creates capital assets 5.6%? Is this a sustainable model? The politicians of Punjab should really think hard," he asked.
Tewari argued that Punjab must rethink its fiscal priorities. "Punjab has to stop doling out freebies. The state just can't afford it."
Congress MP Manish Tewari on Thursday raised concerns over Punjab's worsening financial health. He said the state's debt has surged from ₹15,250 crore in 1996 to an estimated ₹4.47 lakh crore by the end of 2026-27.
The Chandigarh MP blamed "populist and profligate spending" by successive governments over the last three decades and warned that Punjab "just can't afford freebies."
Sharing a series of posts on X, Tewari said Punjab's debt stood at ₹15,250 crore in 1996 and doubled to ₹32,496 crore by 2002.
"The debt, therefore, is not militancy-related but a consequence of populist and profligate spending over the past 30 years by successive governments," he said.
According to Tewari, the state's debt is projected to touch ₹4.47 lakh crore by the end of the 2026-27 financial year.
Since the early 1990s, Punjab has alternated largely between the Shiromani Akali Dal-BJP alliance and the Congress. The Aam Aadmi Party came to power in 2022.
The Akali Dal-BJP alliance then governed from 1997 to 2002, followed by Congress under Amarinder Singh from 2002 to 2007. The Akali Dal-BJP coalition returned and completed two consecutive terms between 2007 and 2017 under Parkash Singh Badal.
Congress came back to power in 2017 under Amarinder Singh before leadership changes brought Charanjit Singh Channi to the chief minister's post. In 2022, the AAP won a sweeping mandate, and Bhagwant Mann became the chief minister.
Don't Miss: Ravneet Singh Bittu quits Union Cabinet, sets sights on state politics ahead of Punjab polls
'BORROWING TO PAY INTEREST'
The Congress MP said Punjab's finances have reached a point where borrowings are being used to service existing debt instead of funding development.
He said about 23% of the state's revenue receipts, amounting to ₹28,755 crore, will go towards interest payments. Debt servicing, including repayment of principal and interest, stood at ₹43,194 crore in 2025-26.
"In effect, the state is borrowing to pay interest on existing debt rather than spend on development," Tewari said.
SECOND-HIGHEST DEBT BURDEN
Tewari said Punjab's debt-to-GSDP ratio stood at 46.6% as of March 31, 2025, making it the second highest in the country. The consequence is that on May 31, 2025, Punjab had the second highest debt-to-GSDP ratio (46.6%) in the country - trumped only by Arunachal Pradesh at 57%, he added.
In another post, he warned: "Actually the situation is much worse."
He said in a reply to his Parliament question as of 31st March 2025, the debt-to-GSDP ratio of Punjab stands at 46.6%, "still the second-highest in the country."
Highlighting the pressure on the state's finances, Tewari said Punjab's annual debt servicing cost is around ₹42,481 crore. "This is more than 23% of the state revenues. It means for every one Rupee of revenue generation by Punjab, 23 Paisa go towards only debt servicing," he stated.
The Congress leader added that after meeting revenue expenditure and debt obligations, only about 5.6% is left for capital expenditure that creates long-term assets.
"What is then left for Capital Expenditure- development expenditure that creates capital assets 5.6%? Is this a sustainable model? The politicians of Punjab should really think hard," he asked.
Tewari argued that Punjab must rethink its fiscal priorities. "Punjab has to stop doling out freebies. The state just can't afford it."