Lok Sabha Question No. 3040 (UNSTARRED), answered on 2021-03-15
Subject: Debt-to-GDP Ratio
Ministry: FINANCE
Asked by: Adoor Prakash

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA

## UNSTARRED QUESTION NO.  3040

## TO BE ANSWERED ON MONDAY, 15 th  March, 2021 / 24 Phalguna, 1942 (SAKA)

## Debt-to-GDP Ratio

## 3040. ADV. ADOOR PRAKASH:

Will the Minister of FINANCE be pleased to state:

- a) whether the Government has reviewed the debt to GDP ratio of the States;
- b) if so, the details thereof, State-wise;
- c) whether aggressive borrowing of States is causing higher debt for the States; and
- d) if so, the details thereof and the measures proposed by the Government in this regard?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHR ANURAG SINGH THAKUR)

- (a) & (b) As per the recommendations of the Fourteenth Finance Commission (FFC), during the period from 2015-16 to 2019-20, the States were eligible for flexibility of 0.25 percent over and above the normal fiscal deficit limit of 3 percent of Gross State Domestic Product (GSDP), if their debt-GSDP ratio was less than or equal to 25 percent in the preceding year. Accordingly, the debt-GSDP ratio of all States was monitored. The debt-GSDP ratio of all States  for  the  financial  year  2017-18  was  last  reviewed  in  the  year  2019-20,  State-wise details of which are at Annexure .
- (c) & (d) States are allowed to borrow as per the recommendations of the Finance Commission, which prescribed that fiscal deficit of all States will be anchored to an annual limit  of  3  percent  of  Gross  States  Domestic  Product  (GSDP).  Further,  in  wake  of  current COVID-19  pandemic,  additional  borrowing  limit  of  up  to  2  percent  of  GSDP  has  been allowed to States for the year 2020-21 linked to specific State Level Reforms.

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Debt to GSDP ratio of States for 2017-18

|    | State             | 2017-18   | Remarks                    |
|----|-------------------|-----------|----------------------------|
|  1 | Assam             | 17.08%    | Debt/GSDP ratio within 25% |
|  2 | Chhattisgarh      | 18.62%    | Debt/GSDP ratio within 25% |
|  3 | Gujarat           | 19.50%    | Debt/GSDP ratio within 25% |
|  4 | Karnataka         | 17.26%    | Debt/GSDP ratio within 25% |
|  5 | Madhya Pradesh    | 23.65%    | Debt/GSDP ratio within 25% |
|  6 | Maharashtra       | 17.93%    | Debt/GSDP ratio within 25% |
|  7 | Odisha            | 22.27%    | Debt/GSDP ratio within 25% |
|  8 | Sikkim            | 23.20%    | Debt/GSDP ratio within 25% |
|  9 | Tamil Nadu        | 22.34%    | Debt/GSDP ratio within 25% |
| 10 | Telangana         | 22.00%    | Debt/GSDP ratio within 25% |
| 11 | Uttarakhand       | 23.26%    | Debt/GSDP ratio within 25% |
| 12 | Andhra Pradesh    | 27.63%    | Debt/GSDP ratio beyond 25% |
| 13 | Arunachal Pradesh | 32.70%    | Debt/GSDP ratio beyond 25% |
| 14 | Bihar             | 32.34%    | Debt/GSDP ratio beyond 25% |
| 15 | Goa               | 26.20%    | Debt/GSDP ratio beyond 25% |
| 16 | Haryana           | 26.21%    | Debt/GSDP ratio beyond 25% |
| 17 | Himachal Pradesh  | 36.29%    | Debt/GSDP ratio beyond 25% |
| 18 | Jammu &Kashmir    | 49.25%    | Debt/GSDP ratio beyond 25% |
| 19 | Jharkhand         | 27.91%    | Debt/GSDP ratio beyond 25% |
| 20 | Kerala            | 30.62%    | Debt/GSDP ratio beyond 25% |
| 21 | Manipur           | 39.91%    | Debt/GSDP ratio beyond 25% |
| 22 | Meghalaya         | 30.81%    | Debt/GSDP ratio beyond 25% |
| 23 | Mizoram           | 37.52%    | Debt/GSDP ratio beyond 25% |
| 24 | Nagaland          | 42.87%    | Debt/GSDP ratio beyond 25% |
| 25 | Punjab            | 40.73%    | Debt/GSDP ratio beyond 25% |
| 26 | Rajasthan         | 33.65%    | Debt/GSDP ratio beyond 25% |
| 27 | Tripura           | 27.97%    | Debt/GSDP ratio beyond 25% |
| 28 | Uttar Pradesh     | 34.24%    | Debt/GSDP ratio beyond 25% |
| 29 | West Bengal       | 36.11%    | Debt/GSDP ratio beyond 25% |

Source: CSO, State budget documents