Five years after the BJP-led government took over, the state’s debt burden has spiraled by 53.90 per cent, from Rs 2.69 lakh crore when it came to power to Rs 4.14 lakh crore in the current fiscal. The debt is likely to become Rs 4.71 lakh crore by next year.
The state government will be spending Rs 37,729 crore to serve the debt. The sum is equivalent to the amount that would have been needed to build eight Metro lines similar to the Versova-Andheri-Ghatkopar corridor. Next year, the amount that it will spent on servicing the debt will be Rs 39,207 crore.
Finance Minister Sudhir Mungantiwar said the debt was reasonable as per the established fiscal benchmarks.
“According to the prevailing fiscal indicators, the financial position of a state is considered healthy if the quantum of debt is below 25 per cent of the GSDP. This government has been successful in keeping the quantum below 15 per cent of the GSDP,” Mungantiwar said.
The present debt of the state is estimated to be 14.82 per cent of its GSDP. Mungantiwar said that last year, the debt estimate was pegged at Rs 4,61,807 crore for which a loan of Rs 54,996 crore was to be taken.
He added that the government has restricted the raising of loan to Rs 11,990 crore because of which the total debt of the state has been limited to Rs 4,14,111 crore.
Currently, Maharashtra has one of the highest debt burdens in the country. The state’s burden has steadily been increasing, from Rs 12,000 crore in 1991 to Rs 58,000 crore in 2000.
While the state’s loan burden might be increasing, the government has been shoring up its revenue receipts. The total revenue generated by the state stands at 2.86 lakh crore and is expected to increase to Rs 3.14 lakh crore in 2019-20.
Meanwhile, its revenue expenditure grew Rs 3.01 lakh crore and will increase to Rs 3.34 lakh crore in 2019-20.
Political considerations and sops doled out during five-year period seems to have put across the burden on the state. The state has not had a revenue surplus budget since 2012-13. The deficit currently stands at Rs 14,960 crore, which is the amount that it is spending over and above the total revenue it generates.
Next year, the number will increase to Rs 19,785 crore.
The main expense of the state government now is its cost of establishment. It had been claiming that it wanted to reduce the cost so that more money could be spent on infrastructure development.
Currently, the state spends 52.40 per cent of its revenue in paying salaries and a pension bill of Rs 1.50 lakh crore.
While the number is still high, it is comparatively less to the previous year when it spent nearly 52.40 per cent of its total revenue towards paying salaries.
The government, meanwhile, still has a long way to go before it reaches the figures of 2007-08, where the salary bill accounted for only 50.88 per cent of the state’s revenue receipts. Next year, it will be spending 59.40 of its revenues in paying salaries.