BHUBANESWAR: Odisha’s debt burden will climb to Rs 1.25 lakh crore by the end of the 2021-22 financial year. The state will have to borrow Rs 18,465 crore during the period 2021-22 to finance different programs and other daily activities.
According to the State of Public Debt in Odisha document released by the government on Monday, gross debt is expected to decline from 20.91% (pc) of GSDP in 2020-21 to around 22.46 pc of GSDP in 2023-24 year.
The increase in the debt burden will be driven by the budget deficit resulting from capital expenditures in various programs. The government has, however, maintained that although the debt burden will increase, it will not exceed sustainability limits.
The debt burden by the end of 2020-21 is expected to reach Rs 1,06,540 crore. The status paper argued that the debt burden will be Rs 1,44,828 crore and Rs 1,67,150 crore by the end of the financial years 2022-23 and 2023-24 respectively. Interest payments will fall to 1.27pc of GSDP in 2023-24 from 1.41pc in 2019. This has been achieved largely by borrowing cheaply from the market and canceling old high-cost loans.
The state government recently decided to use loans from the Odisha Mineral Bearing Area Development Corporation fund and the compensatory reforestation fund by changing accounting procedures at interest rates 1.5-2% lower than those of open market borrowing. The government can borrow up to 60 pc of the surplus funds available in these dedicated schemes according to the new accounting procedure.
Rs 18,465 crore to borrow in 2021-22
Rs 1,44,828 crore burden expected in 2022-23
Rs 1,67,150 crore in 2023-24