RBI Report Unveils a Rs 4,000 Crore Slash in State Borrowing Limit for 2023-24
CHANDIGARH: In a Recent Revelation, an RBI report has shed light on a substantial reduction of ?4,000 crore in the state borrowing limit for the fiscal year 2023-24. This development has prompted concerns and criticism, intensifying the debate over the state’s fiscal management and financial decisions.
The Aam Aadmi Party (AAP) government had previously released a White Paper on the state’s finances in June 2022, attributing fiscal challenges to past administrations and highlighting the precarious debt indicators. Alarming statistics revealed that a significant portion of the state’s revenue was being allocated towards debt repayment, with interest payments accounting for a significant 25.5% of revenue receipts in the initial four months of the current fiscal year.
Critics have lambasted the government for a staggering increase of Rs 50,000 crore in the state’s debt burden within an 18-month tenure. The debt-to-Gross State Domestic Product (GSDP) ratio, as per the RBI report, stands at a worrying 48%, signifying a precarious fiscal situation.
The Finance Department’s senior official pointed out that a substantial part of the state’s revenue was being consumed by debt repayment, defending the government against the allegations of fiscal mismanagement. The official stressed that adherence to the Fiscal Responsibility and Budget Management Act remained a non-negotiable aspect of the state’s financial planning.
