As finance minister Kanu Desai presented Gujarat’s yearly budget on Feb 2, several aspects surfaced portraying the current situation of the state’s finances.

As per the state’s finance department, the total debt in the state currently stands at ₹3.38 lakh cr.

This number is equivalent to 15.34% of the state’s gross household product (GHP), added the finance department.

This debt includes several loans, including market loan-power bonds, central loan-advance, loans from financial institutions, and National Small Savings Fund (NSSF) loans.

A change in the segregation of these loans was observed this year, as the central government’s loan was reduced from 11.87% to 3.90% and NSSF’s loan was reduced from 51.59% to 7.35%.

Meanwhile, the market loan’s share catapulted from 32.20% to 83.63%.

The 2022-23 numbers portray that market loans hold a lion’s share of Gujarat’s total debt, which emphasises the reliance on them.

As per the official numbers, Gujarat’s expenditure on debt in 2004-05 was 10.79%, which, after nearly two decades, has reduced to 7.45% in 2023-24.

However, the high-interest rates of NSSF loans, which are 7.35% of the total debt share, have been acting as a burden for the state’s finances.

Interest payments on public debt as a percentage of revenue have come down to 11.68% in 2023-24 as compared to 11.76% in the previous year.

The state’s debt is believed to grow to ₹3.77 lakh cr in the coming period.

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