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

Junk food push causing severe public health crisis of obesity, diabetes in India: Report

By Rajiv Shah  A new report , “The Junk Push: Rising Consumption of Ultra-processed foods in India- Policy, Politics and Reality”, public health experts, consumers groups, lawyers, youth and patient groups, has called upon the Government of India to check the soaring consumption of High Fat Sugar or Salt (HFSS) foods or ultra-processed foods (UPF), popularly called junk food.

Insider plot to kill Deendayal Upadhyay? What RSS pracharak Balraj Madhok said

By Shamsul Islam*  Balraj Madhok's died on May 2, 2016 ending an era of old guards of Hindutva politics. A senior RSS pracharak till his death was paid handsome tributes by the RSS leaders including PM Modi, himself a senior pracharak, for being a "stalwart leader of Jan Sangh. Balraj Madhok ji's ideological commitment was strong and clarity of thought immense. He was selflessly devoted to the nation and society. I had the good fortune of interacting with Balraj Madhok ji on many occasions". The RSS also issued a formal condolence message signed by the Supremo Mohan Bhagwat on behalf of all swayamsevaks, referring to his contribution of commitment to nation and society. He was a leading RSS pracharak on whom his organization relied for initiating prominent Hindutva projects. But today nobody in the RSS-BJP top hierarchy remembers/talks about Madhok as he was an insider chronicler of the immense degeneration which was spreading as an epidemic in the high echelons of th

Astonishing? Violating its own policy, Barclays 'refinanced' Adani Group's $8 billion bonds

By Rajiv Shah  A new report released by two global NGOs, BankTrack and the Toxic Bonds Network, has claimed to have come up with “a disquieting truth”: that Barclays, a financial heavyweight with a “controversial” track record, is deeply entrenched in a “disturbing” alliance with “the Indian conglomerate and coal miner Adani Group.”

Modi govt intimidating US citizens critical of abuses in India: NY Christian group to Biden

Counterview Desk  the New York Council of Churches for its release of an open letter calling on the Biden administration to “speak out forcefully” against rising Hindu extremist violence targeting Christians and other minorities in India. In the letter addressed to President Biden, Secretary of State Antony Blinken, and other major elected officials, the NY Council of Churches expressed "grave concern regarding escalating anti-Christian violence" throughout India, particularly in Manipur, where predominantly Christian Kuki-Zo tribals have faced hundreds of violent attacks on their villages, churches, and homes at the hands of predominantly Hindu Meitei mobs.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

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".

Link India's 'deteriorating' religious conditions with trade relations: US policymakers told

By Our Representative  Commissioners on the United States Commission on International Religious Freedom (USCIRF) raised concerns about the “sophisticated, systematic persecution” of religious minorities by the government of Prime Minister Narendra Modi at a hearing on India in Washington DC.

Green revolution "not sustainable", Bt cotton a failure in India: MS Swaminathan

MS Swaminathan Counterview Desk In a recent paper in the journal “Current Science”, distinguished scientist PC Kesaven and his colleague MS Swaminathan, widely regarded as the father of the Green Revolution, have argued that Bt insecticidal cotton, widely regarded as the continuation of the Green Revolution, has been a failure in India and has not provided livelihood security for mainly resource-poor, small and marginal farmers. Sharply taking on Green Revolution, the authors say, it has not been sustainable largely because of adverse environmental and social impacts, insisting on the need to move away from the simplistic output-yield paradigm that dominates much thinking. Seeking to address the concerns about local food security and sovereignty as well as on-farm and off-farm social and ecological issues associated with the Green Revolution, they argue in favour of what they call sustainable ‘Evergreen Revolution’, based on a ‘systems approach’ and ‘ecoagriculture’. Pointing ou

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

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.

Jharkhand: Attempt to create red scare for 'brutal crackdown', increase loot of resources

Counterview Desk  The civil rights group Forum Against Corporatization and Militarization in a statement on plans to crackdown on “64 democratic progressive organisations” in Jharkhand under the pretext of the need to investigate their Maoist link, has alleged that this an attempt to suppress dissent against corporate loot and create an authoritarian state.