On Budget eve, MP seeks 5,600 cr loan

Bhopal: A day ahead of Madhya Pradesh state Budget presentation, the govt went ahead and sought a loan of Rs 5,600 crore to foot its expenditure as the state's Economic Survey pegged the growth rate at 8.04%. Deputy chief minister Jagdish Devda tabled the Economic Survey of MP in the assembly on Tuesday. With this the state's overall debt has mounted to Rs 4.90 lakh crore which is more than the total budget size of the state (Rs 4.21 lakh crore) for the year 2025-26
Moreover, a supplementary budget was rushed through in the house to tide over expenses for the current fiscal. The report sought to allay fears on this count stating that the amount of debt taken by the state govt in a year has never exceeded the limit set by the Reserve Bank of India (RBI) for the purpose. Besides, the debt-gross state domestic product (GSDP) ratio has also come down to 27.99% in 2023-24 as compared to 39.5% as it stood in 2004-05. The survey, however, conceded that the ratio may go up to 31.30% in 2025-26.The survey report further said that the average interest paid on outstanding loans in Mar 2024 was 7.28%, which is likely to reduce to 7.11% in Mar 2025, indicating a decline in debt service burden on the state. The survey report said that an analysis of the fiscal condition of the state shows that prudent fiscal policies of the state govt except for Covid pandemic period in 2019-20 has kept fiscal deficit well under control. The data for the year 2025-26 shows that revenue collection of the state govt and devolution of state's share in Central taxes are both set to rise, which shall pave the way for maintaining MP as revenue surplus and a healthy fiscal management.With Tuesday's loan of Rs 5,600 crore, the total debt taken by the state in the financial year 2025-26 has gone up to over Rs 70,000 crore and overall debt on Madhya Pradesh to Rs 4.90 lakh crore.