The expenditure of ₹ 11,338.6 crore, likely to be incurred on account of interest payment and servicing of debts during the current financial year, has cast a shadow on whether the government will be able to get relaxation under the Fiscal Responsibility and Budget Management (FRBM) norms for enhancing borrowings next year.
Officials are doubtful about the State retaining the enhanced borrowing capacity in the light of limits set by the 14th Finance Commission that the debt servicing component should not exceed 10 per cent of the total receipts for seeking relaxation of FRBM norms.
The State government managed to get relaxation of norms under the FRBM Act for the current year to enhance borrowings to meet the aspirations of the people.
Year book
The officials quoted the statistical year book 2017 which projected expenditure (revenue account) on account of interest payment and servicing of debt to be about ₹11,338.6 crore.
The expenditure was to the tune of ₹7.809.77 crore in the revised estimates of the previous fiscal and ₹7,942.47 crore in 2015-16.
The total receipts including revenue receipts (₹ 79,623.99 crore), non-tax revenue (₹ 6,601.36 crore) and grants-in-aid and contribution (₹ 26,857.66 crore) had been pegged at ₹ 1.13 lakh crore during the same period. With the debt servicing and interest payment on the verge of crossing the stipulated limit, officials are apprehensive that the State may not get the benefit of relaxation during the next year.
Officials are also sceptical whether the State will meet the targets for revenue collection at the end of the financial year. The total revenue receipts up to October stood at ₹45,369.73 crore, little over 40 per cent of the target set for the current year. Going by the quantum of revenue receipts after the first half of the financial year, the major task before the government is to make sure the targeted revenue receipts are achieved, senior officials said.
“The State cannot afford to allow its capacity to borrow to shrink during the next year, being the crucial election year,” a senior official told The Hindu.
