The National Council of Applied Economic Research (NCAER) has released a report stated that Gujarat has reduced its public debt-to-GSDP ratio (in last 10 years) by 4.5%, the highest among India’s 21 major states.

With a debt-to-GSDP ratio of just 18.2%, Gujarat has one of the lowest debt ratios among major states.

Gujarat has achieved this while maintaining an average interest rate on state securities at 7.5% with an average maturity of 7.4 years, as per report.

According to the NCAER Working Paper ‘The State Of The States: Federal Finance In India’ by Barry Eichengreen and Poonam Gupta, Gujarat, along with Odisha and Maharashtra, maintains a debt level below 20% of state GDP, significantly lower compared to states like Punjab (47.6%), where the ratio is nearly 50%.

Key Fiscal Indicators

- Financial Discipline: Gujarat demonstrates over 90% compliance with key fiscal parameters, including Revenue Deficit, Fiscal Deficit, and Outstanding Liabilities.

- Fiscal Deficit: The state’s average 10 year primary deficit remains notably low at 0.3% of GSDP.

- Economic Growth: Gujarat has achieved a 12% growth in GSDP.

Gujarat's approach to fiscal management ensures financial stability while fostering economic growth. This balance of controlled borrowing with economic expansion sets an example.

The NCAER paper, analysing 21 major states, highlights significant variability in debt levels. Gujarat, alongside Odisha, West Bengal, and Maharashtra, demonstrates fiscal prudence, while most other states have experienced rising debt-to-GSDP ratios over the last decade.