Gandhinagar: Responding to the media’s query on the public debt of Gujarat State, the Finance Department’s top official, JP Gupta, said that Gujarat is very careful and pragmatic about its debt, and when compared to the GSDP-public debt ratio, Gujarat is in a better position than all other states barring Odisha.

Gupta said, ‘Gujarat’s economy is Rs. 24 lakh crore this year. The Centre has prescribed that any state can take debt to the limit of 27 percent of its GSDP and not more than that. In the case of Gujarat, it would come to Rs. 5.50 lakh crore. However, Gujarat has taken only 15% of the debt compared to GSDP. When comparing GSDP to debt ratio, Gujarat’s debt is less than all other states barring Odisha. Gujarat is very careful and pragmatic in this domain and takes the least debt.’

Gupta said the budget size of Gujarat this year is 11 percent more than the previous annual budget, which equals Rs. 31,000 crore.

Elaborating on that another Finance department official, Aarti Kanwar said that money has to be borrowed to finance the growth. She said the government’s attempt is always to get loans at the best available rates. Not all borrowing is the same. The borrowing money includes the Government of India’s capital assistance which is an interest-free loan for fifty years. Borrowing also included NABARD loan which is available at the lowest rate.

She said Gujarat’s fiscal deficit for the coming year shall be estimated at 1.86 percent, well below the prescribed limit of 3 percent. She said Guajrat’s public debt is permitted in the limit of 27.1 percent of GSDP, however, it is just in the range of 14.17 percent. The government keeps in mind that coming generations must not be burdened. The budget this year is increased by 11.5 percent compared to the previous budget but when deciding budget size, the government thinks about fiscal capacity, meaning tax return. The State has Rs. 1.50 lakh crore tax revenue which is better than many states. She said the outstanding guarantee’s permitted limit is Rs. 20,000 crore against which Gujarat has it just Rs. 1464 crore.

She said the budget is always finalized in accordance with the year 2005 Gujarat Fiscal Responsibility Act. The parameters in this act are binding. Gujarat always keeps a budget revenue surplus since 2011, barring the year 2020-21 due to the Covid pandemic.

DeshGujarat