State heading towards tough time as quantum of borrowings reduced  

The State Government appears to be heading towards a tough time in the coming months as the quantum of borrowings has been brought down yet again.

The State has proposed to raise close to ₹70,000 crore loans during the financial year 2025-26. Of these, open market loans were pegged at ₹64,539 crore, ₹4,000 crore loans from Government of India and another ₹1,000 crore through other loans, according to the figures presented in the overall budgetary position of the current fiscal.

However, the quantum under the borrowings and other liabilities for the fiscal year has been cut to ₹54,009 crore, going by the provisional details released by the Comptroller and Auditor General (CAG) of India for April.

This is not the first time the Union Finance Ministry has restricted the borrowings limit of the State. It had imposed similar cuts in the borrowings in the past too citing financial discipline.

Interest payment

The expenditure on account of interest payment is continuing to rise, imposing a huge burden on the exchequer. The State had made a provision of ₹19,369 crore towards interest payment during the current fiscal and had repaid ₹2,260 crore, 11.67% in April alone, indicating that the total payment at the end of the fiscal could cross the budgetary estimates. It may be recalled that expenditure on account of interest payment in the last financial year was ₹26,688 crore as against the ₹17,729 crore projected in the budget estimates.

Meanwhile, the State registered an overall revenue of ₹16,473 crore in April, 5.78% of ₹2.84 lakh crore projected in the budget estimates. Of the total, borrowings constituted ₹5,230 crore and tax revenue ₹10,916 crore. Revenue through GST was ₹4,054 crore, stamps and registration (₹1,126 crore) and State Excise duties (₹1,288 crore). Non-tax revenue and grants in aid and contributions remained non-starters at ₹253 crore and ₹68.85 crore, respectively. Non-tax revenue was just 0.80% of the ₹31,618 crore and grants in aid 0.30% of ₹22,782 crore projected in the budget estimates, according to the CAG report.