Punjab Sees 10% Growth in Revenue Receipts Amid Deficit and Subsidy Challenges

Punjab’s Revenue Receipts Rise by 10% Despite Deficit and Rising Subsidy Costs
Punjab has reported a 10% increase in its revenue receipts for the April-August period of FY 2024-25, totaling ₹34,983 crore, up from ₹31,840 crore in the same period last year. This growth is attributed to stronger property registration, excise duty collections, and higher revenue from the state’s share of Union taxes. However, the state still faces a significant revenue deficit and growing subsidy expenses, particularly for power subsidies.
The revenue collection reached 34% of the ₹1.03 lakh crore target for 2024-25. Tax revenue, accounting for 80% of the total, saw a 13% rise, driven by excise duty and registration fee growth of 16% and 28%, respectively. However, GST revenue experienced only modest growth at 5.26%. Non-tax revenue grew 15%, but grants-in-aid from the Centre dropped by 11%, affecting overall collections.

Despite the rise in revenue, Punjab faces a revenue deficit of ₹13,507 crore for the April-August period, 58% of the full-year estimate. Subsidies, especially for electricity, accounted for ₹10,110 crore of the ₹48,489 crore total revenue expenditure. The state recently rolled back ₹3 per unit in power subsidies for certain consumers, a move expected to save ₹2,200 crore annually.

Borrowing for the period reached ₹15,903 crore, about 52.2% of the yearly borrowing target. While the borrowing amount was slightly lower than last year, the state has requested an additional borrowing limit of ₹10,000 crore from the Centre to meet its financial obligations.