The AAP government's freebies push in Punjab will have the state, which already is one of the most fiscally stressed states, missing the fiscal targets by a wide margin yet again this fiscal, shows an analysis.
According to an India Ratings' analysis of the Punjab budget for FY24, the Bhagwant Mann government will likely close the year with a fiscal deficit of Rs 33,216 crore which is a whopping 5.3 per cent of GSDP or gross state domestic product from the budgeted Rs 23,835 crore or 3.8 per cent in FY24.
This comes on top of the state closing the previous year with a 5 per cent fiscal deficit.
The Centre allows a state to borrow annually only 3 per cent of its GSDP and an additional 50 bps more on meeting certain reforms in the power distribution and public transport sectors.
Punjab's fiscal stress will continue even in the medium-term and will remain one of the fiscally most stressed states, says Sunil Kumar Sinha, the senior director at the agency.
This is because the state's .
