The demand for the package has been made by Punjab CM Bhagwant Mann, who announced several sops, including free 300 units of electricity to every household every month. The moves came despite the state having unpaid subsidy bills of over Rs 9,000 crore to the distribution entities and government departments having arrears of over Rs 2,600 crore.
A recent study by the Reserve Bank of India had identified Punjab among the five most fiscally vulnerable states, and had warned that freebies would accentuate the crisis.
After taking over as the CM, Mann had met PM Modi in New Delhi on March 25 and sought the Rs 1 lakh crore package to put the state’s economy back on track. He also raised the issues of Punjab during the recent meeting of the Niti Aayog governing council and sought funds for sectors like food processing and a special package to strengthen the canal system.
“To get rid of Punjab’s debt, Idemanded Rs 50,000 crore per year for two years. It was a part of my speech. I had demanded it earlier too,” Mann had said after the meeting. The state has debt of over Rs 3 lakh crore. Punjab’s debt to GSDP ratio is projected to increase from 42. 5% in 2019-20 to 46. 8%, according to the RBI study.