Lok Sabha Question No. 931 (UNSTARRED), answered on 2017-07-21
Subject: States Debt Crisis
Ministry: FINANCE
Asked by: BALASUBRAMANIAM SENGUTTUVAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA UNSTARRED QUESTION NO. 931

TO BE ANSWERED ON FRIDAY, THE 21 st July, 2017/ 30 Ashada, 1939(SAKA)

## STATE DEBT CRISIS

## 931.   SHRI B. SENGUTTUVAN:

Will the Minister of FINANCE be pleased to state:

- a) Whether according to the Reserve Bank of India (RBI) the debt crisis in States is all  set  to  worsen  and to  double  over the next fiscal year and if so, the details thereof, State/UT-wise along with the reasons therefor;
- b) Whether the Tamil Nadu State's debt has run up to Rs. 2.56 crore with the social sector expenditure in the current budget at Rs. 78000 crore and if  so, the details thereof; and
- c) Whether the freebie  culture  is  responsible  for  stultifying  the  progress  of  Tamil Nadu which has fallen to the 16 th from a prime position on growth index and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN MINISTRY OF FINANCE

## ( SHRI ARJUN RAM MEGHWAL )

- (a)  As  per  Reserve  Bank  of  India  (RBI)  Report  titled  'State  Finances;  A  Study  of Budgets of 2016-17', there is no mention of debt crisis in States, worsening of debt position and doubling of debt level in the next fiscal year.
- (b) As per RBI report, the outstanding liability of State Government of Tamil Nadu as at end 2017 is estimated to be Rs. 2560.7 Billion and the social sector expenditure of the State during 2016-17 (BE) is estimated to be Rs. 781.8 Billion. The details are given in the Annex-I .

(c) RBI report has not made any observation on the ranking of the States on growth index. As per CSO, the real Gross State Domestic Product (GSDP) growth of State Government of Tamil Nadu during 2016-17 is 7.94%, which is higher than the Real All India GDP growth of 7.11% for the corresponding period.

## Composition of Outstanding Liabilities of Tamil Nadu (As at end March 2017)

| Component of borrowing         | Amount (Rs. in billion)   |
|--------------------------------|---------------------------|
| State Development Loans        | 1,833.1                   |
| NSSF                           | 252.3                     |
| Loans from LIC                 | -1.1                      |
| Loans from GIC                 | 0.2                       |
| Loans from NABARD              | 22.3                      |
| Loans from SBI and other Banks | -0.6                      |
| Loans from NCDC                | 0.9                       |
| Loans from other Institutions  | 4.2                       |
| Loans from Banks and FLs       | 25.9                      |
| Internal Debt                  | 2,11.3                    |
| Loans from Center              | 163.3                     |
| Provident Fund                 | 185.1                     |
| Reserve Fund                   | 19.2                      |
| Deposit and Advances           | 80.4                      |
| Contingency Fund               | 1.5                       |
| Total Outstanding Liabilities  | 2,560.7                   |

## Composition of Social Sector Expenditure of Tamil Nadu in 2016-17

| Component                         | Amount (Rs. in billion)   |
|-----------------------------------|---------------------------|
| Revenue Expenditure               |                           |
| Social Services                   | 578.3                     |
| Rural Development                 | 107.2                     |
| CapitalOutlay                     |                           |
| Social Services                   | 72.0                      |
| Food Storage and Warehousing      | 4.9                       |
| Rural Development                 | 9.6                       |
| Loans and Advances by State Govt. |                           |
| Social Services                   | 9.8                       |
| Total Social Sector Expenditure   | 781.8                     |

Source: RBI report '' State Finances; A study of Budgets of 2016-17''