Indian States — Its Debts
Indian states — Its Debts
Top 10 states contribute to more than 70% of the absolute debt of all states. Uttarpradesh and Maharashtra contribute to the highest amount of debts. Even in some of the states, to pay salaries to Employees governments are taking loans. Debts are rising in every state either because of Pandemic or Inefficiency in handling state finances. Freebies are the biggest ones that debts are increasing. Agriculture subsidies, Gold subsidies, Business subsidies and so on…All these must be given for whom it is required. Everything is interlinked in finance. If the Government is giving freebies, there is another way they need to get back the amount. The main reason behind petrol rates won’t fall is “For every 1 rupee increase in excise duty of petrol, the Indian government will get 14,200 crores per year”. India has the highest taxes on Petrol and Diesel in the world. Taxes on petrol accounts for 69% and they will grow further. Kudos, We made a significant achievement. Don’t live in a dilemma like, As the barrel price of crude increases petrol rates are increasing. Without taxes, Petrol and diesel cost less than 30 rupees per litre as per today's price.
Percapita Debt
Instead of projecting debt in crores, the smarter way to project state government debts is in per-capita debt (Individual debt). I have a debt of 70000 as per my state, check your debt as per your state. Though Uttarpradesh and Maharashtra account to the highest amount in debts, Per-capita debt is far less than the other states because of Population. Per-capita debt is calculated on Total debt of state to the population of that state. Debts of state governments are rising at larger rates than it was projected. Kerala is being one of the examples, the debts rose more than 70% as compared to 2016 and to 2019. Sometimes these debts may halt Infrastructure and development projects.
Is the Indian state governments trying to cut down its debts?
My answer is No, States started borrowing at a higher Interest rate. The Governments lending more and more. Will have to wait and see about the outcome after few years.
Note: I am sorry for missing some states, I wasn’t able to find some of the state's data.
