UP: Total indebtedness to go up more than 2.5 times in 10 years
Uttar Pradesh’s total indebtedness will go up substantially on March 31, 2020. So, will the debt burden of its citizens.
Uttar Pradesh’s total indebtedness will go up substantially on March 31, 2020. So, will the debt burden of its citizens.
As the state’s borrowings show no signs of receding, the state might be inching towards a debt trap with the state’s total indebtedness estimated to go up more than 2.5 times in the past 10 years.
A close scrutiny of state’s finances indicates that the state’s indebtedness will reach ₹473563.22 crore on March 31, 2020 against ₹174971.83 crore as on March 31, 2010. For a population of 22 crore, the estimated debt burden will be ₹21,525 at the end of 2019-2020. UP’s indebtedness vis-à-vis the Gross State Domestic Product though came down from 38.6 percent in 2009-2010 to 27.9 percent in 2014-2015, it is estimated to reach 30 percent on March 31, 2020.
The fiscal deficit is also expected to reach ₹46010.62 crore at the end of financial year, about 2.97 percent of the GSDP.
The state’s total expenditure on salaries of employees and pension is also going up. The state government had spent a sum of ₹84160 crore on payment of salaries to employee and ₹38476.49 crore on pension. This expenditure is estimated to go up to ₹117779.32 crore on salary and ₹53134.31 crore on pension on March 31, 2020. The state’s total expenditure on debt servicing vis-à-vis the revenue receipts too are going up year after year. The state spent 14.8 percent of revenue receipts on debt servicing in 2017-2018. It’s expected to go up to 15.5 percent of revenue receipts in 2019-2020.
Minister for finance Rajesh Agarwal in his budget speech though claimed that about 12 percent increase in size of annual budget. This increase in the annual budget, however, is not reflected if the size of two supplementary budgets presented in 2018-2019 is also taken into account. Agarwal had presented an annual budget for ₹4,28,384.53 crore in the state assembly on February 16, 2018. Later he also presented supplementary budgets of ₹34,833.24 crore on August 27, 2018 and ₹8054.92 crore on December 19, 2018.
