Chandigarh, May 21, 2025: The Central Government has dealt a serious financial blow to Punjab by slashing its borrowing limit for the fiscal year 2025–26 by ₹16,676 crore. Against a requested borrowing of ₹47,076.40 crore, the Centre has approved only ₹30,400.40 crore.
For the April–December period alone, Punjab had sought ₹35,307 crore but was allotted only ₹21,905 crore. The total proposed borrowing ceiling for the full year was ₹51,117 crore.
The Centre cited Punjab’s non-payment of power subsidies ₹5,444 crore already overdue and ₹4,107 crore still pending as the key reason for the cut. Additionally, the state’s recent loans worth ₹4,151.07 crore and earlier borrowing of ₹1,976 crore for power-related liabilities contributed to the Centre’s decision.
Punjab’s fiscal health remains under pressure, with total debt expected to reach ₹4.17 lakh crore by the end of the financial year. Of this, ₹18,189.89 crore is earmarked for debt repayment and ₹24,995.49 crore for interest payments alone. With revenue projections at ₹1.11 lakh crore and expenses estimated at ₹1.35 lakh crore, the fiscal deficit is projected at ₹23,957.28 crore.
Centre Slashes Punjab’s Borrowing Limit by ₹16,676 Crore, Citing Unpaid Power Subsidies
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