Even as the Reserve Bank of India (RBI) has been warning against the state’s rising debt burden, the public debt of Uttar Pradesh is estimated to touch Rs 7.84 trillion in the next fiscal year 2023-24.
Although UP’s debt burden has fallen to 32.1 per cent of the Gross State Domestic Product (GSDP) in 2023-24 compared to 34.2 per cent in Revised Estimates for 2022-23, in absolute terms the sovereign debt has jumped from Rs 7 trillion to Rs 7.84 trillion during the period.
According to the UP Annual Budget, the nominal UP Gross State Domestic Product (GSDP) has been estimated at Rs 24.39 trillion in 2023-24.
Interestingly, the estimated public debt of Rs 7.84 trillion exceeds the UP Annual Budget of Rs 6.90 trillion by Rs 94,000 crore or nearly 14 per cent. Last year, an RBI article flagged concerns over a built-up financial stress in several states — and suggested corrective steps in the five most indebted provinces.
Referring to the economic crisis in Sri Lanka, an article drafted under the guidance of RBI Deputy Governor Michael Debabrata Patra singled out five most indebted states namely Punjab, Rajasthan, Bihar, Kerala and West Bengal.
Although UP does not figure among the top indebted states in India, yet the state witnessed its public debt ratio shoot past 30 percent of the GSDP during the pandemic years owing to difficult economic conditions and muted tax collection, a phenomenon which was pan-Indian as well as global following Covid-19 exigencies.
While UP had successfully tamed the public debt ratio below 30 per cent till 2020-21, it increased to 33.4 per cent and 34.2 per cent during the 2021-22 and 2022-23 (Revised Estimates) fiscal years due to pandemic.
Meanwhile, UP is estimated to receive about Rs 71,200 crore, 2.9 per cent of GSDP, in loans from the Centre during 2023-24 compared to Rs 51,860 crore (2.5 per cent of GSDP) during 2022-23.
According to Chief Minister Yogi Adityanath, the UP Budget of Rs 6.90 trillion was aimed at laying the foundation of the ambitious target of UP becoming a trillion-dollar economy by 2027.
“We have provided budgetary allocation to all the key sectors. UP has to develop to realise the aim of India becoming a $5-trillion economy,” he underlined.
Adityanath said his government adhered to the Fiscal Responsibility and Budget Management norms and tamed the fiscal deficit to Rs 84,883 crore or 3.48 per cent of the GSDP.
