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Beyond sacrilege and Satluj, this is how Punjab must fix its fiscal crisis urgently

Punjab’s debt will not shrink and the MSP debate will not be resolved through identity politics or louder television debates, however sincerely the underlying grievances are felt.

Punjab’s public discourse over the past several months has been consumed by sacrilege legislation, the film Satluj being dropped from a streaming platform, and the re-litigation of human rights cases from the 1980s and 1990s. While these matters deserve serious engagement, this should not be at the cost of everything else.

As noisy debates dominate television and social media, Punjab’s debt has crossed Rs 4 lakh crore. Farm organisations, meanwhile, continue to press, legitimately, for a legal guarantee for Minimum Support Price. Neither question gets the sustained attention the identity and historical-grievance debates do. A state cannot out-argue its way out of a fiscal crisis; it has to fix it, point by point.

Also Read: Satluj risks rekindling anger & distrust in Punjab. It’s not about the film, but the votes

Punjab’s debt trajectory is unsustainable, and no programme for the state’s economic revival is credible unless it starts here. Three reforms would change the arithmetic without touching welfare benefits genuinely needed by the poor.

First, the free farm power subsidy, which costs around Rs 10,000 crore annually across roughly 14 lakh tubewells, should be retargeted so that only PM-Kisan-eligible farmers continue to receive it. Punjab had 11.34 lakh PM-Kisan beneficiaries in the April-July 2025 instalment cycle. On that basis, roughly 20 per cent of tubewell connections could shift to paid tariffs, freeing around Rs 2,000 crore a year.

This also bears on the MSP debate. Once power is priced for a category of farmer, that cost becomes a legitimate part of the cost of cultivation and should be reflected in the Commission for Agricultural Costs and Prices (CACP) formula. It should not sit outside the formula as a hidden subsidy. A statutory MSP guarantee that ignores priced-in power would rest on an incomplete cost base.

Second, Punjab State Power Corporation Ltd’s (PSPCL) Power Purchase Agreements (PPAs) with private generators, built around high fixed capacity charges regardless of power drawn, need more than marginal renegotiation. The state should create a statutory framework to cancel the most contentious PPAs, especially those signed without competitive bidding or later found to be one-sided, and refer them to the power regulator to set fair, cost-reflective replacement terms within a fixed timeline.

Third, GST enforcement should move away from raids and discretionary action toward forensic, AI-enabled audits that flag inconsistencies across returns, invoices and input tax credit claims. That would recover more from large defaulters while reducing harassment of small,........

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