By the end of this financial year, the 11 crore residents of the state will be under a collective debt of around Rs.2.53 lakh crore, or Rs.23,000 each — the highest in the country.
When deputy CM Ajit Pawar, who heads the finance department, tables the state budget on Wednesday, he will have to tackle this issue of public debt head on, otherwise Maharashtra faces the risk of plunging into a debt trap as the government will be forced to borrow more to pay off the old debt and allocate less and less for development.
Already, much of the new debt incurred, at least Rs.20,000 crore annually, goes into interest payments rather than for creating new assets, say experts.
The state’s outgoing on interest payments for this year is nearly Rs.18,523 crore, at 7.23% interest rate.
In the last 13 years, since the Congress-NCP government took over, the debt has ballooned from Rs.44,000 crore to Rs.2.53 lakh crore, a hike of more than five times.