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- Rajasthan MP Karnataka State Finances Analysis; GDP Growth And Debt | RBI Report
New Delhi13 hours agoAuthor: Guru Dutt Tiwari
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The wheel of development is sinking in the quagmire of debt. States are going to take 52% more loan between January and March than what they had taken in 9 months between April and December. 30 states had taken a total loan of 2.28 lakh crore during April to December 2022 and Rs 3.40 lakh crore in January-March 2023. Are preparing to take a loan of Rs. Karnataka will take maximum ~36 thousand crore loan. This picture has come out in the report of the Reserve Bank.
Punjab is the biggest borrower
Punjab is the biggest borrower in the country. It has taken debt up to 53.3% of its GDP. According to the Reserve Bank, the debt on any state should not exceed 30% of its GDP. As a result, a large part of the income of the states is being spent in paying the interest. Punjab and Haryana are paying 21% of their earnings in interest, which is the highest in the country.
Free schemes are the main reason for debt
Madan Sabnavis, Chief Economist of Bank of Baroda, says that this stops other necessary expenses and affects development. Free schemes are also the major reason for debt. States should spend only 1% of GDP on these. But Punjab is doing up to 2.7%, Andhra 2.1% and MP-Jharkhand 1.5%.
Andhra tops in spending on free schemes
Andhra Pradesh (27,541 crore) leads in spending on populist schemes. Madhya Pradesh 21 thousand crores. And Punjab a total of 17 thousand crores. Is operating free plans.
Maharashtra is spending the least share on health
- Delhi (13%) is also on top in spending on health. Maharashtra (4.1%), Punjab (4.2%) and Telangana (4.3%) spend the least.
- Rajasthan and UP spend 6.8%, Bihar 6.7%, Chhattisgarh 6%, Jharkhand 5.6% and MP-Haryana-Gujarat 5%.
Delhi tops in spending on education, Telangana lags behind.
- Of the total expenditure, Delhi (20.5%), Assam (20%), Bihar (17%) spend the most on education. Lowest in Telangana (6%) and Manipur (10%).
- Rajasthan spends 17%, MP-Maharashtra 14.7%, Jharkhand 14%, Gujarat 12.7%, UP 12.4% and Punjab-Chhattisgarh 12%.
Where will the money come from if the tax is reduced?
Due to the increase in demand after Corona, the states got a lot of tax. But next year the GDP growth rate will be around 6%. Will get less tax. In such a situation, bearing the burden of interest payment is a big challenge. Rajni Sinha, Chief Economist, Care Ratings India