BHUBANESWAR: The debt burden of the State is expected to increase in the next three years from 15.6 per cent of the gross State domestic product (GSDP) to 18.1 per cent of the GSDP in 2025-26 because of fiscal deficit arising out of higher capital spending in different programmes of the government.
According to the status paper published by the State government on public debt, borrowing from different sources will increase Rs 1,34,757 crore in 2023-24 from Rs 1,12,401 crore projected for the 2022-23 financial year. The debt stock will go up by Rs 22,356 crore in a year because of an increase in different development activities in the post-Covid period.
Though official sources claimed that debt will be within a sustainable limit, the major problem is the stabilisation of tax and non-tax revenue of the State around Rs 90,000 crore in a year. Finance department officials said that a major thrust is needed to increase the tax and non-tax revenue to implement different programmes launched by the government.
While the State’s own tax revenue has been projected at Rs 46,000 crore in the 2022-23 budget, the non-tax revenue will be around Rs 48,200 crore. Unless the State’s revenue increases and stabilises around Rs 1 lakh crore per year, the debt burden will go up to Rs 1,59,230 crore in 2023-24 and Rs 1,87,236 crore in 2025-26.
The borrowing resorted to by the State government is way beyond the ceiling fixed by the Centre in line with the recommendations of the 15th Finance Commission. The debt of the State should have been Rs 23,175 crore at 3.5 per cent of the GSDP fixed by the Centre instead of Rs 1,12,401 crore for 2022-23 as projected by the government in the budget.
Sources in the Finance department, however, said that steps have been initiated to contain borrowing by the government. The State government has not resorted to open market borrowing because of funds from other low cost sources like the Odisha Mineral Bearing Areas Development Corporation (OMBADC) and Compensatory Afforestation Fund Management and Planning Authority (CAMPA). Odisha has seen unsustainable debt levels at 50 per cent of GSDP, servicing of which was about 34 per cent of revenue receipts in the past.