Lok Sabha Question No. 3820 (UNSTARRED), answered on 2017-03-24
Subject: Debt Burden
Ministry: FINANCE
Asked by: M. K. RAGHAVAN, SISIR KUMAR ADHIKARI, SAKSHI SWAMI MAHARAJ

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE PLAN FINANCE-I DIVISION

## LOK SABHA

## UNSTARRED QUESTION NO. 3820

TO BE ANSWERED ON FRIDAY, THE 24 th  March, 2017/ 3 Chaitra, 1939

## DEBT BURDEN

3820.  SHRI M. K. RAGHAVAN: SHRI SISIR KUMAR ADHIKARI: DR. SWAMI SAKSHIJI MAHARAJ:

Will the Minister of FINANCE be pleased to state:

- a)  whether the Government is aware that many of the States/ UTs in the country are in Debt Trap;
- b)  if so, the details thereof and the reasons therefor;
- c)  whether as per the recommendations of Finance Commission, a State/ UT with more than  20  per  cent  of  debt  to  Gross  State  Domestic  Product  (GSDP)  ratio  should  be considered  as  debt  stressed  and  if  so,  the  details  therefor  and  the  debt  share  of GSDP, State/UT-wise; and
- d)   the steps taken by the Government to improve the conditions of States/UTs?

## ANSWER

## MINISTER OF STATE IN MINISTRY OF FINANCE ( SHRI ARJUN RAM MEGHWAL )

- (a  to  d)    One  of  the  terms  of  reference  of  Fourteenth  Finance  Commission  (FFC)  was  to consider the resources of the State governments and demands on such resources under different  heads,  including  the  impact  of  debt  levels  on  resource  availability  in  debt stressed states, for the five years commencing on 1 st April 2015, on the basis of levels of taxation and non-tax revenues likely to be reached during 2014-15.

FFC has not adopted the criteria of Debt/GSDP with more than 20% for categorizing any State  as  debt  stress  State.  FFC  has  noted  that  there  were  varying  degrees  of  fiscal stress among States and it is difficult to draw a line and categorise some as seriously debt stressed. As gleaned from Finance Accounts and Budget documents of the States, the State/UT-wise details of debt to GSDP ratio of the States/UTs during last three years are placed at Annex .

In  its  assessment  of  fiscal  needs  of  the  States,  FFC  have  provided  for  full  interest payment by the States and recommended biggest ever increase of 10% in the share of States  in  net  proceed  of  shareable  pool  of  Union  taxes,  from  32%  to  42%.  The substantial increase in tax devolution and grant-in-aid recommended by FFC is a major step in the process of transferring more resources to the States in the nature of untied funds so that States may make and implement schemes or programmes which are best suited to their local needs and requirements.

*****

(SAKA)

## Annex to reply to part (a to d) of Lok Sabha unstarred question No. 3820 for 24.03.2017 regarding Debt Burden

| Sl. No.   | States                | 2014-15 Actuals   | 2015-16 Revised Estimates   | 2016-17 Budget Estimates   |
|-----------|-----------------------|-------------------|-----------------------------|----------------------------|
| 1         | Andhra Pradesh        | 24.2              | 22.3                        | 24.4                       |
| 2         | Arunachal Pradesh     | 40.7              | 30.2                        | 27.0                       |
| 3         | Assam                 | 19.8              | 20.0                        | 20.6                       |
| 4         | Bihar                 | 25.8              | 23.2                        | 23.9                       |
| 5         | Chhattisgarh          | 15.4              | 15.2                        | 17.5                       |
| 6         | Goa                   | 30.3              | 23.9                        | 36.7                       |
| 7         | Gujarat               | 22.1              | 22.7                        | 23.0                       |
| 8         | Haryana               | 19.2              | 23.8                        | 27.7                       |
| 9         | Himachal Pradesh      | 41.1              | 39.3                        | 38.3                       |
| 10        | Jammu & Kashmir       | 52.1              | 46.9                        | 53.6                       |
| 11        | Jharkhand             | 20.4              | 26.5                        | 23.5                       |
| 12        | Karnataka             | 23.1              | 23.6                        | 17.8                       |
| 13        | Kerala                | 31.0              | 30.6                        | 29.0                       |
| 14        | Madhya Pradesh        | 24.2              | 20.8                        | 27.1                       |
| 15        | Maharashtra           | 17.8              | 18.9                        | 18.5                       |
| 16        | Manipur               | 47.7              | 41.6                        | 42.0                       |
| 17        | Meghalaya             | 29.3              | 26.1                        | 30.6                       |
| 18        | Mizoram               | 66.8              | 49.0                        | 49.9                       |
| 19        | Nagaland              | 50.6              | 33.4                        | 39.5                       |
| 20        | Odisha                | 15.4              | 16.4                        | 19.1                       |
| 21        | Punjab                | 30.8              | 31.4                        | 32.3                       |
| 22        | Rajasthan             | 26.0              | 30.7                        | 35.4                       |
| 23        | Sikkim                | 28.3              | 23.3                        | 26.7                       |
| 24        | Tamilnadu             | 20.4              | 20.3                        | 18.8                       |
| 25        | Telangana             | 23.5              | 22.3                        | 22.0                       |
| 26        | Tripura               | 33.4              | 29.5                        | 31.1                       |
| 27        | Uttar Pradesh         | 32.2              | 33.9                        | 33.8                       |
| 28        | Uttarakhand           | 24.4              | 23.8                        | 22.2                       |
| 29        | West Bengal           | 34.0              | 32.5                        | 33.7                       |
|           | All States/GSDP       | 24.4              | 24.9                        | 25.1                       |
|           | UTs with legislature: |                   |                             |                            |
| 1         | NCT Delhi             | 7.5               | 6.3                         | Not Available              |
| 2         | Puducherry            | 27.3              | 24.2                        | Not Available              |

Note: In case of UTs, Revised estimates and Budget estimates for the years 2014-15 and 2015-16 respectively are taken from RBI publication of "State Finances-A study of budgets of 2015-16"