When the Assembly elections are held in Gujarat in 2022, the amount of public debt of the state government will cross three lakh crore. According to the Finance Department, the state’s public debt is expected to increase to Rs 2.96 lakh crore by March 2021.
According to the finance department, public debt stood at Rs 2.17 lakh crore at the end of March 2018, rising to Rs 2.38 lakh crore at the end of March 2019. When the figures were last released, public debt rose to Rs 2.66 lakh crore in March 2020. Public debt is a concern for any government. As the debt components change, the government now gets less central loans and more market loans.
According to a document from the Gujarat government’s finance department, the public debt figure could reach 2.96 crore on March 21. Public debt of the government includes market loans, power bonds, central government loans and advances, loans from financial institutions as well as banks as well as NSSF loans.
According to Finance Department sources, the debt component has changed between 2009 and 2017, with the central government’s debt ratio falling from 11.87 per cent to 3.29 per cent. Similarly, the share of NSSF loans fell from 51.59 per cent to 23.26 per cent, while the share of market loans increased from 32.20 per cent to 68.28 per cent. Which sheds light on the growing reliance on market loans.
In the next two years, i.e. when the Gujarat Assembly elections come, by 2022, Gujarat’s public debt will have crossed Rs 3 lakh crore, with the largest debt being based on market loans. The government also has to pay principal and interest on the amount owed to the public.