Chandigarh, Jan. 4 -- Amid growing fiscal challenges, the Punjab government is likely to borrow Rs.12,006 crore in the last quarter of the 2025-26 financial year. The state government has indicated its borrowing plan for the January-March period to the Reserve Bank of India (RBI), with the funds to be raised from the open market through the sale of state securities. According to its borrowing calendar, Rs.3,000 crore will be raised in January, Rs.4,000 crore in February, and Rs.5,006 crore in March. Punjab's borrowing accounts for about 2.4% of the record sum of Rs.4.99 lakh crore to be raised by states and union territories in this quarter through bond sales. In its budget estimates for the current fiscal year, the state government had projected net borrowing of Rs.34,201 crore, and the remaining amountwas raised in the first three quarters. Though the borrowing is within the limit approved by the central government and the RBI, the cash-strapped state's rising debt liability has raised concerns. As per the budget estimates 2025-26, the outstanding debt is estimated to reach Rs.4.17 lakh crore as on March 31, 2026 - an increase of 9% from Rs.3.82 lakh crore in the previous fiscal year. With a debt-GSDP ratio of 46%, Punjab is already among the indebted states in the country. Another concern is that a major portion of the government borrowing has been used for debt servicing - repayment of principal and interest - as well as meeting other expenditures. In FY26, the outgo on debt servicing, estimated at Rs.43,194 crore, including Rs.24,995 crore towards interest payments and Rs.18,199 crore for repayment of principal, exceeds the estimated net borrowing for the year. "The government is not able to generate enough revenue to meet its current expenditure. This deficit is being met through loans," an economist had told this newspaper after the budget estimates were presented last year. A finance department official said loans are being raised at very competitive rates to minimise the interest burden. "We have also been renegotiating older, high-cost loans taken by previous governments to bring down the interest rate wherever possible. A lot of effort has gone into this," said the official, who did not wish to be identified. Meanwhile, the state's financial challenges continue to mount - first due to the ravaging floods that wreaked across several districts and then because of the rationalisation of goods and services tax (GST) rates. "The indirect tax overhaul, which shifted to a two-slab structure from September 22, has dampened growth in GST collection," finance minister Harpal Singh Cheema told HT last week. GST is the single largest contributor to the state's own tax revenue, accounting for 43.5% in FY25. With state polls due early next year, the government is under increasing pressure to fulfil its promise of a Rs.1,000 monthly allowance to all women, implement the old pension scheme, and release pending dearness allowance instalments to employees....