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Sunday, May 28, 2023

Storm in a Tea Cup- State Loans


There are some reports in the press about the Loan position of the state Government in the last five years. Much noise about nothing just quoting CAG reports without understanding the intricacies is not the correct way of interpreting the loan situation.

In the last budget( 22-23 ) session the then-leader of the opposition raised this loan issue. I had explained it. So here it is once again.

  1. The present state government is repaying ( principal and int.)Rs 1450 cr. annually as legacy of the previous Left Front govt.
  2. Back to back loan which includes 50 years ( repayment) special assistance loan from GOI and loan taken for GST shortfall during Covid in the name of state governments to be repaid by central govt stands at Rs1045 crores. This too is shown as loan of state govt.
  3. The employees GPF is also showed as loans as they parked with the state govt (universal rule) .
  4. Public Ledger was opened by the BJP Govt.when it came to power in 2018 to bring transparency in fiscal management. The DDOs were asked to deposit all parked funds and interest from their accounts into their respective PL accounts, so that fiscal discipline is maintained . The fund in these PL accounts as per norm also shown as loans.
  5. Rural Infrastructure Development Fund ( RIDF) from NABARD is considered as “a low hanging fruit “all state governments try to get this loan as it is cheap and is for rural infrastructure. It is an accomplishment of the state government that today it stands around Rs500 crores from the Left Front Government meagre Rs. 150 cr due to lethargy. Funds need to be sourced for speedy rural development.
  6. External aided projects were only two ( Jica and Indo German) today it is perhaps 14. 90 per cent repayable by GoI.
  7. The state government has not even gone for Ways and Means last Financial Year,which is a step many state govts. have followed due to financial crunch but Tripura has been able to manage its finances. There is No Over Draft even after huge increase of social pensions, covid problems, DA payment etc.

So all this talk about loans is misunderstood what maybe called “ A Storm in a Tea Cup” This is what I recall from my own memory, further clarification I am sure will come from FD when and if required.

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