The resource gap stood at ₹23,560 crore by November, and there are four months still to go for the new fiscal (2019-20).
The government requires ₹78,236 crore to pay salaries, pensions, interests, and subsidies between December and Mach 2019.
The total receipts are likely to be around ₹54,675 crore during this period, leaving a resource gap of more than ₹23,560 crore.
And, as a result, the government is contemplating availing bank loan worth ₹15,000 crore to meet requirements such as industrial incentives, farm loan waiver, capital infusion, and interest-free loan, which are some of the electoral promises.
The State continues to experience stress on finances during the current fiscal too for various reasons, including “non-release of funds by the Centre as mandated,” interest payments and increased borrowings.
Though the State government has not gone for overdraft so far, ways and means option turns out to be a common phenomenon due to paucity of funds. The State has already crossed its budget estimates on ways and means front, which stand at ₹3,684 crore as against estimated ₹1,674 crore for the current financial year.
Due to the Fiscal Responsibility and Budget Management (FRBM) limit of 3%, the government cannot go for additional borrowings from the market. The government has been requesting the Centre to relax the FRBM norms to increase the borrowing limit by at least 0.5%, if not 1%, from the 3% cap.
The government’s efforts have gone in vain on this count, sources say. The financial situation turned red as, apparently, the government could not rein in expenditure. While receipts were ₹1,81,059.76 crore, the expenditure stood at ₹1,91,262.61 crore. Till date, the expenditure stood at ₹10,202.89 crore, which is far higher than the receipts.
The public debt of the State was estimated to touch ₹2,49,435 crore during the financial year 2018-19. The State’s total debt shot up to ₹2,25,234 crore by the end of the 2017-18 fiscal, as per the revised estimates, up from ₹2,01,314 crore in the 2016-17.
Interest payments
The interest payments have also been on the rise. The government would end up paying more than ₹15,000 crore towards interests this fiscal.
