NEW DELHI: The states have outstanding liabilities of a whopping Rs 59,89,360 crore as on March 31, 2021, and the new sources of risk have emerged in the form of rising expenditure on non-merit freebies, the Supreme Court was told on Thursday by a PIL petitioner opposing irrational handouts.
While Uttar Pradesh and Maharashtra top the chart with liabilities of Rs 6,62,891 crore and Rs 5,36,891 crore respectively, Punjab gets the distinction of being the leader in the debt to Gross State Domestic Product (GSDP) ratio.
Punjab, with a liability of Rs 2,49,187 crore, has the worst debt to GSDP ratio at 53:3 in the current fiscal, said the written submission filed by PIL petitioner Ashwini Upadhyay before a bench headed by Chief Justice N V Ramana.
The top court was hearing the PIL which opposes the practice of political parties promising freebies during elections and seeks the Election Commission to invoke its powers to freeze their election symbols and cancel their registration.
It is also considering the distribution of freebies by the political parties from public funds and its adverse impact on the fiscal health of the country.
The bench, which has sought the views of stakeholders like the Centre, Niti Aayog and Finance Commission and asked them to brainstorm on the issue of freebies, had hinted it may order setting up a mechanism for suggesting measures to the government to deal with the issue.
A written submission containing suggestions has been furnished by Upadhyay through senior advocate Vijay Hansaria and lawyer Ashwani Kumar Dubey.
The written note quoted the 'Handbook of Statistics of Indian States for 2020-2021' published by the Reserve Bank of India, and the June 2022 bulletin of the federal bank in which an article under the heading 'State Finances: A risk analysis in the backdrop of the Sri Lankan crisis and the heavy indebtedness of the States' was published to buttress its claim against freebies.
It said, these "new sources of risk have emerged in the form of rising expenditure on non-merit freebies, expanding contingent liabilities and the ballooning overdue of DISCOMS".
The submissions gave the details of total liabilities of states and their debt to GSDP ratio.
Rajasthan, which has the total liability of Rs 3,91,482 crore, comes second to Punjab in the debt to GSDP ratio which is at 39:5 in the current fiscal.
The PIL petitioner said Election Commission has not been able to regulate the promises made by political parties in their manifestos despite the apex court's direction in earlier judgements.
"In the interest of transparency, level playing field and credibility of promises, it is expected that the manifestos also reflect the rationale for the promises and broadly indicate the ways and means to meet the financial requirements for it. Trust of voters should be sought only on those promises which are possible to be fulfilled," the apex court had said.
The mandate of the Election Commission has not been obeyed, the written submission said, adding "No action has been taken by the Election Commission in this regard against any political party for violation of the Model Code of Conduct mentioned above."