The Hindu : Andhra Pradesh / Hyderabad News : ‘State debt may reach 1.10 lakh cr.’

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Monday, Jul 27, 2009
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Andhra Pradesh

Andhra Pradesh - Hyderabad

‘State debt may reach 1.10 lakh cr.’

Special Correspondent

M. Venkaiah Niadu

Hyderabad: Senior BJP leader M. Venkaiah Naidu on Sunday charged the Centre and the State with ‘mismanaging’ their finances and resorting to huge borrowings, which was detrimental to development.

He told a press conference here that the Centre’s borrowings were expected to touch a whopping Rs.4.51 lakh crore this year, as against Rs.1.31 lakh crore in 2005-06. Its non-Plan expenditure was projected at around Rs.6.18 lakh crore, while the Plan was estimated to be around Rs.3.25 lakh crore, which was just about half of the non-Plan spending.

Mr. Naidu stated that around 10 per cent of the Central revenue would go towards debt servicing, even as the fiscal deficit was expected to reach 12 per cent of GDP. In the first two months this year, the Centre and the State had borrowed Rs.1.89 lakh crore, 82 per cent more than last year.

He said the situation was equally alarming in the State, as the accumulated debt was expected to reach Rs.1.10 lakh crore by the current year. The Gross State Domestic Product growth rate was down for the past few years, from more than 10 p.c., to 5.53 per cent this year. Referring to the State outlay of Rs.1.03 lakh crore, he asked “where is the revenue”. The target of Rs.1 lakh crore could not be achieved last year. An allocation of Rs.50,000 crore was not spent during the last five years, reflecting the Government’s performance.

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