Loan burden on the Odisha government was Rs 54,006.20 crore by August-end and it could reach Rs 64,991.83 crore by end of 2016-17 fiscal, state Finance Minister Pradip Kumar Amat told the Assembly.
The Finance Minister in a written reply said as per CAG’s preliminary report, the loan burden on the state by end of August this year was Rs 54,006.20 crore. Amat, however, said that the loans being taken from the open market are being utilised in the capital asset creation in the state.
The state government by August 31, 2016, has borrowed Rs 2,200 crore from the open market at different rates of interest like 7.5 percent, 7.57 percent and 8 percent. Similarly, loans have also been taken in the ongoing fiscal by the state from different sources like the Union government (Rs 431.83 crore at the interest rate of 0.75 percent to 2.75 percent), NABARD (Rs749.74 at the rate of interest of 5.5 percent) and Provident Fund (Rs191.87 percent at the rate of 8.1 percent), Amat informed.
With the allocation of Central funds for different schemes slashed drastically, the State Government will have to depend on market borrowing to finance different projects. The debt burden, which had stabilised during the last couple of years, is on the rise again.
The debt burden will increase by more than Rs 16,000 crore by the end of 2016-17 compared to 2015-16. Official sources maintained that the debt burden on the State was Rs 48,586.65 crore by the end of 2015-16.
However, the per capita debt burden of the State has considerably gone down during the last eight years while total borrowing has increased marginally. While the population of the State was 4.01 crore in 2007-08, the total borrowing was Rs 36,311.61 crore and the per capita debt was Rs 9,064. The total borrowing marginally increased to Rs 36,430.54 crore in the following year while the debt burden per head reduced to Rs 8,975.
Borrowing of the State increased to Rs 37,730.04 crore during 2009-10 as a result of which the per capita debt burden increased to Rs 9,174 while the population was 4.11 crore at that time. During 2010-11, the population of the State increased to 4.17 crore while borrowing touched Rs 39,136.91 crore and per capita debt burden rose to Rs 9,392. Finance Minister Pradip Amat said the debt burden reduced to Rs 37,980.14 crore in the following year and the per capita debt burden went down to Rs 8,874.
However, official sources maintained that steps are being taken to keep borrowing within the permissible limit. Loan with high interest rate are being repaid.
India’s most industrialised state, Maharashtra, has the largest debt of Rs 338,730 crore ($51 billion) among India’s states, but the southern state of Tamil Nadu—an industrial growth centre—has seen the maximum increase in debt (92%) over the past five years, according to an IndiaSpend analysis of state budgets.
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