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

Telangana government urged to stop 'unconstitutional' relocation of Chenchu tribes

By A Representative The Nallamalla forests are witnessing a renewed surge of indigenous resistance as the Chenchu adivasis , a Particularly Vulnerable Tribal Group (PVTG), have formally launched the Chenchu Solidarity Forum (CSF) on the eve of World Earth Day to combat what they describe as unlawful and forced relocation from the Amrabad Tiger Reserve .

Kolkata dialogue flags policy and finance deficit in wetland sustainability

By A Representative Wetlands were the focus of India–Germany climate talks in Kolkata, where experts from government, business, and civil society stressed both their ecological importance and the urgent need for stronger conservation frameworks.

Dhandhuka violence: Gujarat minority group seeks judicial action, cites targeted arson

By A Representative The Minority Coordination Committee (MCC) Gujarat has written to the Director General of Police seeking judicial action in connection with recent violence in Dhandhuka town of Ahmedabad district, alleging targeted attacks on properties belonging to members of the Muslim community following a fatal altercation between two bike riders on April 18.

Cracks in Gujarat model? Surat’s exodus reveals precarity behind prosperity claims

By Vidya Bhushan Rawat* The return of migrant workers from Uttar Pradesh and Bihar, particularly from Gujarat, was inevitable. Gujarat has long been showcased as the epitome of “infrastructure” and the business-friendly Modi model. Yet, when governments become business-friendly, they require the poor to serve them—while keeping them precarious, unable to stabilize, demand fair wages, or assert their rights. The agenda is clear: workers must remain grateful for whatever crumbs the Seth ji offers.

'Fraudulent': Ex-civil servants urge President to halt Odisha tribal land dispossession

By A Representative A collective of 81 retired civil servants from the Constitutional Conduct Group has written to the President of India expressing alarm over what they describe as the wrongful dispossession of tribal lands in Odisha’s Rayagada district. The letter, dated April 19, 2026, highlights violent clashes in Kantamal village where police personnel reportedly injured over 70 tribal residents attempting to protect their community rights.

India 'violating international law obligations' over Israel ties: UN rapporteur

By A Representative Francesca Albanese, the United Nations Special Rapporteur on human rights in the occupied Palestinian territories, has alleged that India is “violating its obligations under international law” through its continued association with Israel, including defence ties and alleged arms exports during the ongoing conflict in Gaza.

The soundtrack of resistance: How 'Sada Sada Ya Nabi' is fueling the Iran war

By Syed Ali Mujtaba* The Persian track “ Sada Sada Ya Nabi ye ” by Hossein Sotoodeh has taken the world by storm. This viral media has cut across linguistic barriers to achieve cult status, reaching over 10 million views. The electrifying music and passionate rendition by the Iranian singer have resonated across the globe, particularly as the high-intensity military conflict involving Iran entered its second month in March 2026.

Why Tamil Nadu, Periyar, and the Dravidian model aren't just regional phenomena

By Vidya Bhushan Rawat* The election campaign in Tamil Nadu this season is strikingly different. The alliance led by the DMK is consistently referred to as the “ DMK alliance ,” not the “INDIA alliance.” This distinction is unsurprising given the state’s history: Tamil Nadu remains the only state to decisively reject “national” parties. The AIADMK’s surrender to the BJP after J. Jayalalithaa ’s death represents, in many ways, a betrayal of the politics of Tamil identity—an identity Periyar envisioned as Dravidian, not narrowly Tamil.

Chromatographies of the self: Gender, labour, and resistance in Deepti Kushwah's verse

By Ravi Ranjan* Any sensitive reader of contemporary Hindi poetry will find it impossible to overlook the eight poems by Deepti Kushwah recently published in Samalochan . This suite—comprising works such as ‘Ekākelī ābha’ (A Solitary Radiance), ‘Praśna mem camaktā huā’ (Glowing in the Question), and ‘Ek ankahī tapis’ (An Unspoken Heat)—constructs a multidimensional collage where colour transcends mere visual experience.

Search This Blog