The Punjab total debt stock is set to stand at Rs841.45 billion as on June 30, 2019 against Rs693.37 billion of corresponding year 2018. Out of total Rs841.45 billion, Rs8.65 billion are domestic loans against Rs10.89 billion last year (2018). The external loans are of Rs832.80 billion as against Rs682.48 billion last year.
As per budget document, the Punjab debt stock as of June 19 shows a net growth of 21.35% ie. Rs148.3 billion with respect to debt stock of June 2018 out of which 77.65% ie. Rs33.1 billion is a result of Pak rupee devaluation against foreign currencies and remaining 22.35 % ie., Rs115.1 billion is the addition of stock due to new loans and disbursements against already obtained loans.
Experts believe that the size of Punjab's debt is quite low when measured as a percentage of its gross sub-national domestic product (GSDP) and relative to national GDP. As per budget document, the Punjab government obtained international loans from international financial institutions and a few bilateral loans to support the development needs of the province. The focus of external financing remains in the areas of education, agriculture, transport, urban development etc.
The sector wise composition of total outstanding debt is as of June 30, 2019-Agriculture and Livestock (29%), Urban and Community Development (12%), Transport and Communication (22%), Tourism (01%), Industries (01%), Healthcare (5%), Energy (02%), Governance (06%), Environment (01%) and Education (23%). As per budget document, the Punjab's foreign debt portfolio is highly concessionary with an average maturity of 9.5 years as of June 2019. In addition to multilateral development banks, foreign debt stock also includes bilateral loans from China and France.
The World Bank including IBRD and IDA is the leading creditor with 44% share of the total outstanding debt followed by ADB with 29% share in foreign debt stock. As per budget document, the total amount of debt servicing for 2019-20 is estimated at Rs60 billion including interest of Rs16 billion and principal amount of Rs44 billion. The estimated debt servicing is relatively a small liability indicating that the province is sufficient to honour its obligations on account of debt servicing.
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