A newborn in Madhya Pradesh signs no loan document yet inherits a statistical debt burden of around Rs 55,323 the moment the state’s liabilities are divided across its population. No collector comes knocking — but by the time that child turns 22, the state could still be repaying loans it is raising today.
Putting forth two government securities — Rs 1,600 crore for eight years and Rs 1,200 crore for a 22-year term stretching to 2048 the state government moved to raise Rs 2,800 crore. While governments do take loans, long-term borrowing is a systematic method of progressing the state’s economy. What makes this borrowing more significant is a number buried deeper in the state’s finances.
The CAG’s State Finances Audit Report for 2024-25, tabled in the Assembly, shows that 29.43% of the state’s total borrowing that year went toward servicing past debt — almost identical to the 10-year average of 29.30%. In effect, nearly Rs 30 of every fresh Rs 100 borrowed is consumed by old obligations before it can fund anything new.
The CAG has flagged this directly: when a large share of fresh debt goes toward servicing old debt, less is left for capital expenditure — and the report notes MP’s debt has been growing faster than its economy. The numbers bear this out. As per data, internal debt rose from roughly Rs 83,718 crore in 2015-16 to about Rs 3.33 lakh crore in 2024-25. Including central loans and other liabilities, the state’s total outstanding debt now stands at around Rs 5.31 lakh crore.
With the current government, borrowing is also accelerating — from Rs 89,797 crore in 2024-25, to a revised Rs 1.01 lakh crore in 2025-26, to a budgeted Rs 1.06 lakh crore for 2026-27. Alongside that, the state expects to spend Rs 34,437 crore just on repaying old principal.
Finance Minister Jagdish Devda defends the pattern, arguing loans stay within prescribed fiscal limits and fund capital works like roads and irrigation rather than routine expenses — noting the Centre itself offers states 50-year interest-free capital loans.
Still, the CAG’s number leaves an uncomfortable question hanging: if nearly a third of fresh borrowing is already spoken for by past debt, how much is genuinely left to build anything new? That question will only grow sharper with each passing year.