Bhopal: The Madhya Pradesh government, headed by Mohan Yadav, now plans to borrow another ₹5000 crore. The loan is all set to be mobilised on 26th November by offering government stocks through e-auction. Half of this amount will be borrowed in two equal instalments of ₹ 2,500 crore each. The funds should be reflected in the state government’s account by November 27.
It is written that the government intends to borrow ₹2,500 crore for 20 years and another ₹2,500 crore for 14 years. During the last 11 months, the state government has already borrowed ₹40,500 crore. This has increased the pace at which more debts are being accumulated for not only the state but more particularly imposed on the people of Madhya Pradesh, which already owes ₹3.90 lakh crore. The money will be mobilised by either selling government securities in RBI or encashing state stakes. After the e-auction is carried out, the borrowed amount will be repaid to the state treasury no later than November 27.
This loan of ₹5000 crores underlines yet another massive debt on the state account for the financial year. In the past 11 months, the borrowed money has been mainly used for development projects and other government expenses. However, experience has shown that the level of debt has been on the increase, and this has attracted the concern of financial analysts who have opined that it can be a big issue for the state’s economy.
At present, the total outstanding loan of Madhya Pradesh has touched ₹ 3.90 lakh crore, which is a cause for concern for its economic position. Many people think that such a level of indebtedness could have overall effects on development and expenditure strategy in the future. As the Fund is targeted at encouraging development, the role of loans, which is increasing constantly, must be tackled for sustainable fiscus in the long run.
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