Gujarat is considered to be a developed state in the country and has been projected as a model state for the country. But this so-called model state has been constantly burdened with debt which keeps on multiplying in leaps and bounds over the years.
The Gujarat government’s cumulative public debt shot up to an astronomical Rs 3,20,812 crore for the current 2021-22 and estimated to rise to Rs 3,49,789 crore in the coming financial year 2022-23, which is Rs 1,05,824 crore more than the total budget of Rs 2,43,965 crore presented by state Finance Minister Kanu Desai here on Thursday for 2022-23.
According to the statement by the government, under the Fiscal Responsibility Act, 2005, submitted in the Assembly, the state’s estimated public debt of Rs 3,49,789 crore for 2022-23 is expected to cross Rs four lakh crore and rise to Rs 4,09,810 crore in 2023-24 and to a whopping Rs 4,49,810 crore by the end of 2024-25.
Gujarat’s public debt has been consistently rising year-on-year since 2004-05 when it was Rs 16,401 crore that year, except for 2006-07 and the next year.
The state’s cumulative public debt was Rs 1,99,338 crore in 2016-17 which, by an increase of 6.64 per cent, rose to Rs 2,12,591 crore in 2017-18 and to Rs 2,40,651 crore in 2018-19, which is 13.19 per cent rise. But compared to the public debt in 2015-16, in a decade the cumulative public debt has multiplied by two and a half folds from Rs 1,80,743 crore to a projected target of accumulative public debt of Rs. 4,49,789 crore in 2024-25.
The total public debt of Rs 3,20,812 crore as on 2021-22 comprises Rs 2,64,703 crore from market borrowings and power bonds, Rs 28,497 crore from National Small Savings Fund loans, Rs 17,812 crore loans from financial institutions and banks and Rs 9,799 crore from loans and advances from the Central government.
Against this, the Gujarat government has seen constant increases in its revenues over the years. The state’s revenue receipts have increased from Rs 20,265 crore in 2004-05 to Rs 1,63,020 in 2021-22 as per the revised estimates, with about more than Rs 10,000 crore average annual rise during the past decade.
The Gujarat government claims that it is relying more and more towards market borrowings as it’s interest rates are competitive.
“The composition of the debt stock has undergone a change during a period of 2008-09 to 2020-21, wherein the proportion of central government loans has reduced to 2.94 per cent from 11.87 per cent. Similarly share of NSSF Loans has reduced to 10.75 per cent from 51.59 per cent, whereas share of Market Loan has increased to 80.72 per cent from 32.20 per cent highlighting the shift towards increased reliance on Market Loans.”
“The analysis of the debt portfolio of the State reveals that the bulk of the total public debt of Rs 2,98,810 crore is on account of market loans, which comprises 80.72 per cent of the total public debt. The revised estimate for the total debt stock in fiscal year 2021-22 is Rs 3,20,812 crore.”
–IANS
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