MP's borrowing binge continues as state reels under record debt
Bhopal: The state govt will raise a loan of Rs 5,000 crore on May 6, pushing its total debt beyond Rs 4.26 lakh crore -- more than the state's annual budget of Rs 4,21,032 crore. This will be the govt's first borrowing in the current financial year.
A notification for the fresh loan was issued on Thursday. As of March 31, the state's outstanding debt stood at Rs 4,21,740.27 crore. The govt maintains that such borrowings are essential for funding development projects and schemes across the state.
Consent of the central govt has been obtained to the floatation of this loan as required by Article 293 (3) of the Constitution.
Loans taken from the central govt and from other sources were mainly utilised for development of the state and for the creation of remunerative assets such as construction of irrigation dams, improvement of transport services, grant of loans to third parties like cultivators, local bodies, loan to power generation, power transmission among others, states the state govt while taking a loan.
MP has more than five percent of the total debt in the country. Total outstanding liabilities of state govts in India was Rs 93,93,317.5 cr.
In it, Rs 4,80,976.0 cr was total liability of MP, as per RBI at March end (budget estimates 2025). MP stands 9th position in the country in outstanding liabilities.
Despite the rising loan burden, the govt has not hesitated in buying a state plane, new cars for ministers and renovation of ministers' bungalows.
On July 10, the MP govt cleared a proposal to buy a jet plane worth over Rs 230 crore. Among the major financial responsibilities of the govt is the 'Ladli Behna' scheme that needs over Rs 1,550 crore every month.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
33 minutes ago
- Economic Times
Technical Breakout in MCX Hints at Rally; Support Seen at Rs 6,260
'On the daily chart, MCX stock has recently given a breakout from a Pennant formation, a continuation pattern that typically indicates the potential for further upward movement. Traders can buy for a target of Rs 6910-7370 in the next few weeks,' Kkunal V. Parar, Vice-President of Technical Research and Algo, Choice Broking, said. Show more 04:06 06:16 01:28 07:08 01:38 04:40 03:48 02:17 06:32 01:25 02:35 04:55 06:21 04:31 01:40 06:04 05:39 07:05 02:22 05:26 01:45 02:41 02:40 01:29 05:00 03:14 04:45 06:38 01:11 04:28 06:32 02:23 01:51 04:40 02:05 05:11 01:54 01:23 05:12 02:10
Time of India
39 minutes ago
- Time of India
India's new flagship EV policy to be a ‘non-starter' for global biggies
Live Events 'Non-Starter' Stringent Conditions (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India is rolling out a new flagship electric vehicle policy that aims to lure global automakers into making cars locally. It knows Tesla Inc. may still not Narendra Modi-led government will soon start accepting applications under the EV incentive program that was unveiled in March last year, HD Kumaraswamy, India's heavy industries and steel minister told reporters in New Delhi on Monday. Bloomberg News reported on this earlier in the policy offers to slash duty to 15% on any imported electric car priced from $35,000 if the maker invests at least 41.5 billion rupees, or about $500 million, to set up a local plant within three years. Up to 8,000 cars yearly can be imported at this reduced Tesla is unlikely to participate as it isn't keen on manufacturing locally and instead wants dealerships and showrooms to sell imported cars, Kumaraswamy said, without elaborating. Tesla has long wanted to enter India, but disagreements over import duties and local manufacturing commitments have stalled Co. is a no-go for the South Asian nation, showing New Delhi's lingering angst with China. India's commerce minister said in an April interview that the country needs to be 'cautious' about who it allows to invest. VinFast Auto Ltd. is already building a factory in India, even before the new policy kicked in.'The EV policy could be a non starter,' said Jay Kale, sector analyst at local brokerage Elara Securities India Pvt., explaining that there was little benefit in terms of 'pure-play' EV makers without Tesla, BYD and VinFast in the global legacy automakers could benefit by setting up EV-only plants in India and importing electric cars initially under this policy, according to Kale. 'However, how these models pan out in India have to be seen as most of these carmakers haven't been successful in their home markets in EVs,' he the government is keen to boost manufacturing in the world's third-largest car market where demand for EVs is still rising, it faces stiff resistance from domestic heavyweights including Tata Motors Ltd. and Mahindra & Mahindra Ltd., which have long been protected by a wall of high appeal of the new policy is further dulled by stringent conditions like revenue targets and penalties for failing to fulfill them, besides the investment mandates a minimum revenue of Rs 5,000 crore ($586 million) in the fourth year and Rs 7,500 crore a year later for any applicant approved under this policy. Those falling short will face a penalty of up to 3% on the revenue may open as early as this month and extend till March 15 next year, according to people familiar with the discussions who did not want to be named.
Mint
41 minutes ago
- Mint
Monetary policy: We live in interesting times for interest rates
Now that the National Statistical Office (NSO) has given its verdict on the state of India's economy in 2024-25 and its last quarter, all eyes are turned to the Reserve Bank of India (RBI). In particular, to its six-member rate-setting panel, the Monetary Policy Committee (MPC), which begins its three-day meet on Wednesday. With the key determinant for rate action, retail inflation, having declined for the sixth consecutive month—it was below 3.2% in April by the Consumer Price Index—and GDP growth at 6.5% last fiscal year, the MPC has a fine line to tread. Under RBI's inflation targeting framework, it must keep retail inflation within a band of 2% to 6%, with an eye kept on growth. Also read: RBI poised to cut rates as India eyes a steady takeoff The trade-off of growth versus price stability, never an easy one even at the best of times, is particularly problematic when we seem to have the best of both worlds. India's economy is neither too cool nor too hot. With growth reasonably robust and inflation below RBI's central target, this is our own 'Goldilocks moment.' In such a scenario, what should the MPC do? It has already cut policy rates twice this calendar year, once in February and then again in April, and infused substantial liquidity into the banking system. As for spurring economic activity, bear in mind that the rate of interest on loans is only one of many factors in corporate investment and private spending decisions. Cheaper credit is an incentive to borrow, no doubt, but this can be outweighed by other considerations. The ease of doing business, lack of clarity on the external environment (think of US tariff policy) and the state of domestic consumer demand are all major drivers of investment calls. The odds of making worthy use of money, even if it's available cheaply, is what it comes down to. As for a retail sales boost, income levels matter more than loan rates. Taxpayers have a tax stimulus this year, so they may be inclined to spend more than usual, but at lower earning levels, where people's marginal propensity to consume is higher, consumer demand is driven less by overall GDP expansion than by its distribution. Also note that monetary policy needs to be forward-looking. Any rate action takes about two-three quarters to work its way through the economy. The MPC, therefore, must take a call depending on where it expects to see both growth and inflation six to nine months ahead and act accordingly. Also read: Lenders concerned about education loans as US tightens curbs on student visas Unfortunately, it is impossible to know for sure whether price or growth effects will dominate. While trade turmoil led by US tariffs is likely to raise inflation and slow growth down globally, the extent to which India will suffer similar consequences evades a consensus. The economy's momentum from the previous quarter might be strong, but it faces headwinds. Price stability may look durable, but inflation staying tame cannot be assured. Not surprisingly, different central banks have responded differently to the situation they are in. While some like the Bank of England and European Central Bank have cut rates, others such as the US Federal Reserve and Norway's Norges Bank have not, opting instead to hold rates steady in the face of uncertainty. 'Each to its own' appears to be the motto for central banks around the world. Also read: Mint Explainer: How RBI's latest rate cut, change in stance impact borrowers, depositors Our MPC should march to its own tune, guided by an informed reading of evolving growth-inflation dynamics. Whatever call it takes this week on policy rates, let's hope it's favoured by luck as well.
