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Bangalore: State Moving Towards Debt Trap

  •   Fri, Jul 17 2009 10:59:35 AM

TNN

Bangalore, Jul 17: Cash-strapped Karnataka is moving fast towards a debt trap, if the current loan burden of over Rs 65,000 crore is any indication. 

Borrowings and interest payment, besides expenditure on establishment, has increased by nearly 10 times than previous year, according to data provided by the government. This was in reply to a question by H C Neeravari of JD(S) in the legislative council on Thursday.

The state had been raising loans to the tune of Rs 2,500 crore on an average every year to make ends meet. But in 2008-09, loans raised to a whopping Rs 8,652 crore, including market borrowings of Rs 7,462 crore.

Consequently, the government paid principal and interest of Rs 3,782 crore in 2009-09 compared to Rs 1,777 crore.

The debt, divided by the population, gives us the share of debt owed by each person in the state up to Rs 10,000, compared to Rs 31,000 of the Centre.

Yeddyurappa, who is also the finance minister, maintained the state is well within the limit in terms of borrowings. "The fiscal deficit is within 3.5% of the GDP, compared to the average of 4%."

  

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Comment on this article

  • SALVADOR VAZ, THOTTAM/JUBAIL/KSA

    Fri, Jul 17 2009

    Financial experts need to discuss this issue and bring this matter to the ordinary people,the current loan burden of over Rs 65,000 crore, this matters ordinary people not understand and not worried also, once everybody understand then only check the BJP progress ?

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