WHAT IS THE FINANCIAL SITUATION OF PUNJAB? TOP-RANKED STATE GOING TO WORST

Punjab - A state of five rivers most prosperous of India going to be the worst state by going down to the bottom in every list. 

Financial Aspects: 

In Financial Aspects there are specific indicators to know the financial situation of any state that is

 Government Debt to Gross State Domestic Product:

 It is a reliable indicator of how capable a State is in paying its debts. Generally, a low debt-to-GDP ratio is a measure of a healthy economy that produces and sells goods and services without accumulating future debts. The financial responsibility and budget management act 2005 (FRBM) prescribe the ceiling of Debt to GSDP ratio to 25 PerCent. But Punjab had a debt to GSDP ratio of 42.5 per cent as per 2019-2020 data given by RBI. It means 42.5 per cent of Punjab's money is spent on to repayment of debts. The worst part is that as per estimate in 2026-27 it will grow to 46.8 per cent. It means the Punjab govt has to take the necessary steps to check and control this indicator.

An indicative Target has been given by the financial commission

With this indicator, economists keep their eye on the debt indicator. Punjab has the worst condition in terms of debt. About more than 50% of GSDP is debt in Punjab

Fiscal Deficit:

The condition is when the expenditure of the government exceeds its revenue in a year. 

Fiscal deficit = Total Expenditure – Total revenue (Excluding the borrowings)

Per Capita Income:

In 1993, a Punjabi on average earned the third-highest income among all the states (Union territories not counted, barring Delhi). Only small states Goa and Delhi performed better. Punjab retained this position until 2000-01. Since then, there has been an unrelenting slide.

By 2010-11, Punjab’s per capita income was lower than nine other states. Nearly a decade later, in 2020-21, there were 15 states with higher per capita income.

It’s not possible to calculate the precise growth of the per capita income due to changes in base prices (the denominator used for calculating growth). But the state rankings offer a peep into how other states outperformed Punjab on this growth metric.

The Chart above shows the real situation of Punjab. It is the main cause of the youth of Punjab to migrate to foreign countries.

Indicators relating to state spending:

Committed expenditure and Development expenditure shows the financial condition of Punjab. Where committed expenditure shows that the Punjab govt spends money on interest payments, pensions and administrative expenses. The significant portion of committed expenditure is 35%. where Punjab has 47.1% which is much higher. Another is Development expenditure which is shown in the chart above.

Revenue expenditure and Revenue spending to capital outlay:

The chart below shows the short-term expenses or daily expenses and quality expenditures of the states

Composition of state tax:

This indicator shows that the collection is sourced from whether it is from GST collection, centre transferred or non-tax.