Chandigarh, March 27 -- The financial situation in Punjab for the upcoming fiscal reflects a significant dependence on subsidies, particularly in the power sector. Nearly 10% of the state's total budget is allocated to providing free power to various consumer groups, a key financial challenge for the state government.

Out of the total outlay of Rs.2,36,080 crore for the upcoming fiscal, a whopping Rs.20,500 crore will go towards power subsidies in the form of free electricity to farmers and domestic users, and subsidies for industrialists. Though this figure is almost identical to the previous fiscal year, the government still faces outstanding payments to the power department.

The substantial allocation toward power subsidies limits th...