A week after Rs 5k-cr loan, MP borrows another Rs 4k cr

Bhopal: Less than a week after the MP govt sought a loan of Rs 5,800cr, the govt sought another loan of Rs 4,100 crore on Tuesday. The loan would be in two tranches of Rs 2,000 crore for 15 years and Rs 2,100 crore for 9 years. The earlier loan was taken on March 10.With the fresh loans, the total loan of the govt went up to Rs 5.10 lakh crore. The loans have outpaced the total state budget size of MP for financial year 2026-27 by almost Rs 70,000, which is Rs 4.38 lakh crore.Experts in the know of things suggest that MP's financial situation would further be strained from next year, as its share in the central taxes, which was 7.85% till 2025-26, has been reduced to 7.34%. Officials in the finance dept said reducing around 0.5% in yearly devolution would result in the state getting around Rs 7,500 crore less every year as devolution from the Centre for the next five years.MP is among the states in the country whose loan burden has shot to more than 5% of the total debt in the country. Rs 5,31,012.8 crore was total liability on MP, as per RBI at March end (budget estimates 2026).From Rs 52,731.1 crore in 2007 to Rs 5,31,012.8 crore in 2026, the outstanding liabilities of the MP govt increased more than ten times in less than 20 years.Govt points it takes loan for infrastructure development in the state and would continue to do so. Govt mentions in its gazette every time before taking a loan that "though no actual assessment has been made of the value of the physical assets of the state govt, it can be safely assumed that it far exceeds the state's outstanding liabilities".The govt states all the loans taken from the govt of India or from other sources have been mainly utilized for development of the state and for the creation of remunerative assets, such as construction of irrigation dams, canals, tanks, wells etc., improvement of communications, transport services, investment in the share capital of co-operative banks and other co-operative societies, for the grant of loans to third parties like cultivators, local bodies etc. who will repay the loan with interest in instalments and loans to the power generation, power transmission and power distribution companies of the energy department of Madhya Pradesh.However, among the major financial burdens on the state govt is the Ladli Behna scheme, which requires around Rs 1,836 crore per month. Officials said govt also needs money to pool its share in the centrally funded schemes.