Debt on MP would reach Rs 1 lakh crore by next year, says minister | bhopal | Hindustan Times
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Debt on MP would reach Rs 1 lakh crore by next year, says minister

bhopal Updated: Dec 26, 2014 17:19 IST
HT Correspondent
HT Correspondent
Hindustan Times
Jayant Malaiya

Finance minister Jayant Malaiya, while presenting the report card of his departments, said debt on Madhya Pradesh would reach Rs 1 lakh crore by next year but maintained that the financial health of the state was sound.

When reminded that the state government had imposed withdrawal sanctions for payments above Rs 5 crore, Malaiya said that such fiscal discipline was necessary to maintain financial health of the state.

Malaiya was caught in a catch-22 situation on raising VAT (Value Added Tax) on petrol and diesel and reducing it on cigarettes. In his presentation, Malaiya displayed newspaper clippings that published reports on how MP suffered revenue losses due to high VAT compared to its neighbouring states to justify reducing VAT on cigarettes.

When told that the same logic was applicable on petrol and diesel prices also as the neighbouring states had lesser VAT on oil compared to Madhya Pradesh, Malaiya first avoided the question but when pestered replied that MP does not have other resources to generate revenue therefore it was imperative to increase taxes on petrol and diesel.

Malaiya said the economic growth rate of the state in 2013-14 was 40.90% compared to 2003-04 at 26.26%. He said that the debt on state in current year is 22.69% of the GSDP (Gross State Domestic Product) and the government's losses stand at 2.52% for the year 2013-14 which could come down to 1.66% in the year 2014-15, which is lower than 3%, the permissible limits.

Mentioning other achievements he said that all type of payments was being done online, while 75 lakh accounts were opened since December 22 under the PM Jan Dhan Yojna.

Master plan for all 50,982 villages of state has been prepared, while planning of the villages have been decentralized and decided at village level, he added.

Replying to a question, Malaiya rebutted the charge that the state government was not getting adequate funds from the Modi government in comparison to the UPA.