Skip to main content

Reserve Bank study finds Gujarat has to spend huge funds from coffers to pay up for interest taken on loan

Counterview Desk
A new study, “Debt Sustainability at the State Level in India”, by Balbir Kaur, Atri Mukherjee, Neeraj Kumar and Anand Prakash Ekka of the Department of Economic and Policy Research of the Reserve Bank of India (RBI), has found that, as of March-end 2013, a huge 17 per cent of the revenue expenditure of the Gujarat government goes into paying up interests on loan taken by it over the years, which is higher than most states.
Suggesting that this is higher all 17 major states taken up for analysis, except West Bengal (20.9 per cent), the data suggest that Gujarat has progressively paid a higher proportion of interest on loan compared to most states ever since 1981.

Thus, the study finds that between1981-82 and 1991-92, interest formed 10.3 per cent of the revenue expenditure of the Gujarat government, which was higher than six other states. Between 1992-93 and 1996-97, 15.3 per cent of the revenue expenditure went into paying interest, which was, again, higher than six other states. Between 1997-98 and 2003-04, once again, six states paid a higher proportion of revenue expenditure as interest.
But things clearly changed thereafter. From 2004-06 to 2012-13, when ex-Gujarat chief minister Narendra Modi was at his peak, Gujarat spent 20.6 per cent of the revenue expenditure as interest on loans, which was second highest, next to West Bengal (20.6 per cent). 
Worse, a further analysis suggests, from 2004-05 to 2012-13, 21.2 per cent of the revenue receipts, which the Gujarat government received as taxes and non-tax revenues, went into paying up interest on loans, which was higher than most states except Punjab (23 per cent) and West Bengal (24.7 per cent).
The study underlines, there could be “a serious problem of intolerable debt in the long-run equilibrium” in states where the interest payments to revenue receipts ratio was “above the tolerable limit of 20 per cent.” Indeed, Gujarat is one of the three states which falls in this category.
The study further finds that between 2004-05 and 2012-13, Gujarat’s debts formed 29.8 per cent of the Gross State Domestic Product (GSDP), suggesting that these were unsustainable. This was higher than seven other states, suggesting that eight other states, with a higher debt-GSDP ratio, also had similar unsustainable nature of debt. On the other hand, as many states had a lower debt-GSDP ratio, suggesting their debt was more sustainable than Gujarat’s.
The study concludes that “the debt sustainability indicators showed significant improvement during 2004-05 to 2012-13 compared to the earlier phase (1997-98 to 2003-04).” But, clearly, as for Gujarat, this was not the case.
Thus, between 1981-82 and 1992-93, Gujarat’s debt-GSDP ratio was 17.6 per cent and between 1993-93 and 1996-97 it was 19.9 per cent. It shot up to 30.6 per cent in the next phase, between 1997-98 and 2003-04, and in the last phase it went down marginally.

Comments

TRENDING

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

India sees 62 journo deaths, 4th highest, amidst pandemic: Swiss media rights body

By Our Representative The Switzerland-based media rights body Press Emblem Campaign (PEC) has noted that India is the fourth most affected country as far as mediapersons’ death on account of Covid-19 is concerned. According to Blaise Lempen, secretary-general of PEC, the global tally of casualties among media persons in the Covid-19 pandemic has reached 1,036 journalists in 73 countries till date.

Liberating Bengal Hindus? Worst flames of communal division, lessons from the past

By Shamsul Islam*  The whole thrust of the RSS-BJP election campaign for 2021 state assembly elections in West Bengal has been to save Bengal from the rule of Mamata Bannerjee who is allegedly not a ‘Hindu’. Prime Minister Narendra Modi, a self-proclaimed Hindu nationalist, as usual set the polarizing agenda. While addressing the first election rally, he called upon the electorate to overthrow the ‘nirmam’ (cruel) rule of Mamata by showing a ‘Ram Card’. He did not name Hindus directly but there was no confusion about the religious identity of the electorate Indian PM was addressing to.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Pradeep Bhattacharya, who spent his life for the cause of working masses, rational thinking

By YS Gill*  At 11:30 pm on May 3, 2021, I lost my best friend and comrade Pradeep Bhattacharya. He spent his life dedicated to the cause of the working masses and rational thinking. A person of thorough scientific outlook and a well-read student of Marxian thought, he was a walking encyclopedia and could speak on a wide variety of topics from art and culture to science, philosophy, history and politics.

Rs 5 crore 'demand' for India Today anchor: What about 52 lesser souls who died in April?

By Vidya Bhushan Rawat*  A well known Hindutva protagonist masquerading as journalist passed away recently resulting in messages of condolences and tribute right from the Prime Minister and the Home Minister to progressive liberals expressing grief of his untimely death. It is said that he passed away due to cardiac arrest, though the fact is, he was also Covid infected. The Prime Minister and the Home Minister termed him a ‘brave’ journalist, insisting, his passing away has left a big ‘vacuum’.

Modi's Hindutva 'ensuring' empowerment of rich, disenfranchisement of poor

Bhabani Shankar Nayak*  The Hindutva socio-psychopaths are neither nationalists nor patriotic people. These medieval reactionary forces don’t understand the idea of citizenship, justice, liberty, equality and humanism. Indian democracy is merely an electoral transaction for the Hindutva forces. Hindutva forces neither follow science nor understand the sufferings of fellow human beings. These core qualities are common among the Hindutva forces in India.

Communal rhetoric? Hindutva preached by RSS-BJP is 'monolithic', not Hinduism

By Prem Verma*  I am a devout Hindu but not a believer of RSS Hindutva form of Hinduism which brings about hatred of other religions. My Hindu religion has not taught me to look down on other religions and neither has it instilled in me to go about converting others to my religion because my religion is superior.

India's Covid-19 'nightmare': A product of majoritarian Hindutva ideological praxis?

By Bhabani Shankar Nayak*  Indians struggle to find place and time to bury their dead due to the devastating effects of the second wave of Covid-19 in India. The crematoriums in the capital cities are overflowing with dead bodies. People are dying without oxygen and basic medical support. The cities like Delhi and Mumbai are struggling to cope with the rising number of infections and COVID-19 led deaths. The deaths and destitutions are products of a defunct BJP government led by Narendra Modi.

Indian media persons collapsing to Covid disease as fast as 3 per day, third highest

Yogesh Sharma, Shailesh Rawal  By Our Representative  The Switzerland based media rights and safety body, Press Emblem Campaign ( PEC ) has said that it is “alarming for Indian journalists”, who have lost at least 107 colleagues to Covid-19”, noting, Indian “journo-colleagues” have been collapsing to the Covid-19 complications now as fast as three scribes per day. In a statement, PEC said, “India with 107 media corona-casualties has already placed itself on the third position just below Brazil (181 dead) and Peru (140) in the list of Covid-19 victims among journalist.”