Punjab 20 June 2025 : In a major decision, the Central Government has provided significant relief to Punjab. The Centre has restored around ₹4,000 crore out of the total reduction in the state’s borrowing limit. This decision will offer some financial respite to Punjab, as the state will now be allowed to raise nearly ₹3,000 crore in loans with the restoration of this limit.
It is noteworthy that the Central Government had previously reduced Punjab’s borrowing limit by ₹16,477 crore last month. In response, the state government submitted a letter to the Union Finance Ministry presenting facts and disputing ₹11,500 crore of the cut. As per reports, the Finance Ministry has now reinstated ₹4,000 crore of the borrowing limit for the financial year 2025–26. Out of this, Punjab will be able to raise ₹3,080 crore in loans during the first nine months of the fiscal year, while the remaining ₹920 crore will be available in the last quarter.
The Finance Ministry has kept the matter of restoring the remaining ₹7,500 crore under consideration. The Punjab government had claimed that the power subsidy had been transferred to Powercom in a timely manner and had sent the evidence to the Centre. After reviewing the evidence, the ministry restored the ₹4,000 crore borrowing limit. However, the total cut in the borrowing limit still stands at ₹16,477 crore.
It is important to note that the Finance Ministry had set Punjab’s total borrowing limit for 2025–26 at ₹51,176.40 crore. For the first nine months of the current fiscal year, the borrowing limit was ₹38,382 crore, but in May, the Finance Ministry had approved only ₹21,905 crore. The state government has been making efforts to get the reduced limit restored, and as a result, ₹4,000 crore has now been reinstated.
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