Gujarat’s public debt rises to Rs 3.4L cr, each resident owes Rs 48,500
Economists have expressed concern at the situation. Eminent economist and former Vice Chancellor of Gujarat Vidyapith, Dr. Sudarshan Iyengar said,
Published: 01st March 2023 08:37 AM | Last Updated: 01st March 2023 08:37 AM | A+A A-
AHMEDABAD: According to data tabled in the Gujarat assembly, the public debt of the ‘developed state’ has reached a whopping Rs 3.40 lakh crore. The figure stood at Rs 3.20 lakh crore at the end of March last year, which means that every resident of the state had a debt of Rs 46,000, which has since climbed to Rs 48,500.
Economists have expressed concern about the situation. Eminent economist and former Vice Chancellor of Gujarat Vidyapith, Dr Sudarshan Iyengar said, “Debt is required to run any state, but the key question is how this debt is repaid. Most state debts are repaid through various taxes, so if the state’s debt rises, it is almost certain that the government will raise taxes on the general public in the coming days to compensate.”
Even as the Opposition has repeatedly questioned the state government’s increasing public debt figure, the government stated in the assembly on Monday that the public debt as per the revised estimate for the fiscal year 2021-22 is Rs 3,20,812 crore. As per the revised estimate, the government has paid Rs 23,063 crore in interest on public debt in the fiscal year 2021-22. In addition, Rs 24,454 crore in debt was reduced and paid in instalments.
In response to queries posed by two Congress leaders, Arjun Modhwadia and Amit Chavda, about public debt in the assembly, the government stated that Rs 17,812 crore has been borrowed from financial institutions at interest rates ranging from 2.75 to 8.75 per cent. A market loan of Rs 2,64,703 crore attracted 6.68 to 9.75 per cent.
An NSSF loan of Rs 28,497 crore was taken at an interest rate of 9.50 to 10.50 per cent, while Rs 9,799 crore was borrowed as Central debt at interest rates from 0 to 13 per cent. As of January 31, 2023, the state government had paid Rs 22,023 crore in interest for the fiscal year 2020-21, and Rs 23,063 crore in interest for the fiscal year 2021-22. As the government reduced the debt, it paid Rs 17,920 crore in 2020-21 and Rs 24,454 crore in 2021-22.
What CAG said
As per a 2022 CAG report, the public debt of the Gujarat government stood at Rs 3,08,000 crore as on March 31, 2021, much more than its annual budget of Rs 2,40,000 crore for 2022-23.
CAG said Gujarat would have to repay Rs 1,67,000 crore or 61 per cent of its public debt by the next 7 years. Gujarat’s public debt has been projected to touch Rs 4,50,000 crore by the end of 2024-25
Gujarati to be mandatory for classes 1-8
The Gujarat Assembly on Tuesday unanimously passed the ‘Gujarat Compulsory Teaching and Learning of Gujarati Language Bill, 2023’ Bill, mandating the Gujarati language to be taught in all primary schools in the state, including those connected to the CBSE, ICSE, and IB boards. According to the Bill, a school will be required to pay a fine of Rs 50,000 if it is discovered to have violated the rules for the first time. The fine will rise to Rs 1 lakh and then Rs 2 lakh for subsequent infractions. The state government may also order the concerned board or institution to disaffiliate a school that fails to adhere to the stipulation. As per the Bill, schools that are not currently teaching Gujarati will be required to do so in phases beginning with the upcoming academic year 2023-24.