76 per cent increase in borrowings from various states

Mumbai, Ta. 18 July 2020, Saturday

The current financial year has seen a 5 per cent increase in borrowings in various states of the country, which are facing huge revenue losses as a result of the lockdown imposed due to the coronavirus. Corona has led to a huge increase in the cost behind the health care of the states.

From April to July 15 of the current financial year, the state's borrowings stood at Rs 1.3 trillion, up 3 per cent from the previous financial year. To maintain its cash flow, the Center has relaxed the standards for state borrowings.

Apart from this, the Center has also increased the fiscal deficit target from 5 per cent to 5 per cent. At the end of FY2030, the total debt burden of each state was Rs 2.50 trillion. Debt growth has grown at an annual rate of 19.50 per cent between FY2017 and 2020, a report said.

The debt burden of the states has doubled in the last five years. Even in the current financial year, the debt burden is expected to increase in view of aggressive borrowings.

The outstanding debts of the states include the amount of rising bonds issued to support DISCOMs, the amount raised from banks and financial institutions.

Ten per cent of the total debt of the states of the country is on top of ten states. At the end of the financial year 2020, Uttar Pradesh was in the first place with Rs 6 trillion, which is going to be 11% of the total debt.