The Hindu : Huge financial burden on U.P.

Online edition of India's National Newspaper
Monday, Nov 17, 2003

Other States

Other States - Uttar Pradesh

Huge financial burden on U.P.

Lucknow Nov 16. The burden of borrowing on the Uttar Pradesh government has reached an alarming level, with every individual in the state under a personal debt of about Rs 6,000.

The burden of borrowings on the state, especially through market loans, is expected to touch Rs 1,07,922.49 crores by the end of the year 2003-2004. With the state's population touching around 170 million, the debt on each individual works out to be over Rs 6,000.

Interestingly, the debt which stood at around Rs 5,000 per head has increased by Rs 1,000 within a year. The borrowings during the past one year has increased by Rs 14,340.59 crores.

According to the budgetary documents of the government, the total borrowings of the state is expected to be around 51.4 per cent of the gross state domestic product (GSDP) during the end of the current financial year. However, the borrowings were 48 per cent of the GSDP in the last financial year.

The debt on the state, which was Rs 36144.98 crores in the year 1995-96, reached Rs 8,30,100.85 crores in 2001-2002 -- an increase of more than 100 per cent in just seven years.

While the year 2000-2001 witnessed a downfall in the borrowings as projected in the budgetary proposals following bifurcation of the state, about Rs 72,765.64 crores was borrowed as against the expected borrowings of Rs 77,820.93 crores, a decrease of Rs 5,055.29 crores.

Of the total borrowings expected till the end of current financial year, short-term savings of Rs 26,788.46 crores and central loan to the state of Rs 24,491.08 crores account for the maximum debt. While Rs 21,783.34 crores through loans from market and another Rs 8,764.59 crores from financial institutions also contribute greatly to the state's debt.

On Friday last, the Chief Minister Mulayam Singh Yadav presented the state budget for the year 2003-2004 without proposing any new taxes. He also described the financial condition of the state as `grim' and hinted that the state was under debt trap. Presenting a gloomy picture of the finance management of the state, the budget papers show that state borrowings in light of gross state domestic product increased from 40 per cent in 2000-2001 to 48 per cent in 2002-2003. Similarly fiscal deficit-gross state domestic product ratio increased from 5.6 per cent to 6.8 per cent during the period.

The state's fiscal deficit was also expected to go up to Rs 19803.24 crores in 2003-2004, which is 9.4 per cent of the GSDP. According to the figures, the fiscal deficit was Rs 4,380.61 crores in 1995-96, it rose to Rs 11,632.53 crores in 1998-99 but came down to Rs 11,098.73 crores in 1999-2000 and Rs 10179.52 crores in 2000-2001.

A sum of Rs 7,385.79 crores on revenue deficit and Rs 11,738.38 crores on capital expenditure are expected to form a major part of the state's fiscal deficit in the year 2003-2004. Due to an increase in the revenue expenditure as compared to the revenue income, the revenue deficit which stood at Rs 5,168.26 crores in 2002-2003 is expected to go up to Rs 6,077.57 crores in 2003-2004. In the past years, the revenue deficit was much more than what was expected in the budget proposals.

In 2000-2001, against the expected deficit of Rs 5,885.16 crores, it stood at Rs 6,289.31 crores while during 2001-2002, against the estimated revenue deficit of Rs 4031.90 crores, it went up to Rs 7,756.75 crores. As per the budget proposals for the current financial year, revenue receipts are higher by 16.5 per cent in comparison to last year while the expenditure is only 26.5 per cent more in 2003-2004 than the last financial year. The government still expects a net deficit of Rs 1,020.87 crores in the budget. The government maintained that about 88 per cent of the state's total revenue receipts is spent on payment of salaries and pension to the employees and on interest. Total expenditure on these heads is between 165-185 per cent of the revenue received from the state's own sources, which is 70 per cent of the total revenue expenditure.

-- UNI

Printer friendly page
Send this article to Friends by E-Mail

Other States

News Update

Stories in this Section

Huge financial burden on U.P.

Official seeks security