Govt sees us debtors by Rs 42,000 each

State borrowed Rs 65,000 cr, Centre Rs 31.36 lakh cr by end of 2008-09

Govt sees us debtors by Rs 42,000 each

 While an individual’s debt due to State government’s borrowings is Rs 11,000, the balance Rs 31,000 is because of Central government’s borrowings.

Replying to a question raised by JD(S) member H C Neeravari in the Legislative Council, Chief Minister Yeddyurappa said the State government’s total borrowings, which included loans from the open market, during the end of the financial year 2008-09 was Rs 65,000 crore. The total borrowings of the Central government was Rs 31.36 lakh crore.

The chief minister said, interest and principal paid every year were lesser than 10 per cent of the State’s total revenue while that of the Centre had been around 22 per cent of its total revenue.

The State’s borrowings had remained at 28 per cent of the State’s total revenue collection. The State government had been making efforts to bring it to 20 per cent in the next few years. The chief minister said that the State government had to go for more borrowings in 2008-09 as there was no opportunity to rely upon the public accounts (PF, KGID), unlike in the previous years.

However, the State government had restricted the fiscal deficit at 3.5, though there was scope to go up to 4.

Returns

The State government had been paying more than Rs 3,600 crore as interest to the borrowings in the last three years. In 2008-09 the total interest paid by the State government is Rs 3,782.43 crore and the principal is Rs 1,777.91 crore. The interest paid in 2007-08 and 2006-07 are Rs 3,822.69 crore and Rs 3,666.57 crore respectively.

Economic slowdown

The global economic slowdown has hit the revenue collection in the State. According to the Chief Minister the State faced a dip in revenue collection to the tune of Rs 6,721 crore in 2008-09. In a written reply to an unstarred question by Manohar Maski (BJP), the CM said the Government had taken measures to face the impact of the crisis. The Government had decided to bring down non-plan expenditure and go for borrowings. He also said that the crisis had affected the industrial and service sectors badly.

KSFC’s ‘mismanagement’

A few members including Basavaraj Horatti (JD-S), Vimala Gowda (BJP) demanded closure of Karantaka State Finance Corporation. Horatti said many who borrowed money from the corporation committed suicide because of its mismanagement. However, Yeddyurappa refused to close the corporation, stating that 29,989 industrialists including Infosys and Biocon had been benefited by the corporation. The government would make all efforts to improve its services.

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