Haryana debt set to reach ₹1.98 lakh crore
Khattar defends borrowing as means to increase capital expenditure; CM’s principal secretary advises media to stop referring to debt as ‘debt trap’
Haryana’s debt liability is just going up.
The budget estimates that chief minister Manohar Lal Khattar presented on Friday have pegged the state debt liability at Rs 1,98,700 crore at the end of 2020-21 fiscal.
Presenting the first budget of the BJP-JJP coalition government after retaining power in assembly elections in October last year, Khattar, who also holds the finance portfolio, gave himself a pat on the back by citing prudent fiscal management for decline in debt-GSDP (gross state domestic product) ratio.
As per the budget document, when the BJP dethroned the Congress in October 2014, the outstanding debt was Rs 70,931 crore at the end of 2014-15 fiscal. And at the end of this fiscal next month, the state’s debt will be Rs 1,76,832 crore, as per the revised estimates. This means the state government plans to borrow Rs 21,868 crore in coming financial year.
Hence, is Haryana in the debt trap? Or the state is slowly slipping into the vicious debt trap?
During the customary post-budget press conference, the ‘debt trap’ threat became the hotly debated and pricking question that Khattar defended with ease, saying the loan liability was increasing because the capital expenditure (money spent on creating assets) is also increasing.
The soft-spoken additional chief secretary (finance) TVSN Prasad said “definitely the debt has increased” and cited numerous reasons for the rising debt.
He said the government was servicing the old debt and spending on capital expenditure. Prasad also cited numerous other examples like debt-GSDP ratio etc.
“The state debt liability is within the 25% limit prescribed by the 14th Finance Commission,” the budget document says.
Apparently edgy about the debt becoming the top issue of Khattar’s press conference, principal secretary to CM, Rajesh Khullar, advised scribes: “Don’t say debt trap. Do you know the magnitude of the total outstanding debt of the US?”
The chief minister also cited another example of how the salary and pension budget was increasing. Other committed liabilities, Khattar said, like salary and pension bills, were also on the rise. The pension burden in 2014-15 was Rs 4,602 crore and at present, it is Rs 9,000 crore. Similarly, the salary will consume Rs 27,012 crore in next fiscal, up from Rs 13,296 in 2014-15.
As the bureaucrats defended the debt liability citing a plethora of financial jargons, Khattar tried to explain the issue in a “common man’s language.”
There are two ways, he said, such as reduce the capital expenditure and impose tax, but the third and the best option is to take loan that can be paid easily. “That is what the government is doing,” Khattar said.