The Indian Reserve Bank’s report has expressed concern about the financial situation in Jharkhand. According to the report, Jharkhand is one of the most indebted states in the country, with its debt burden reaching up to 38.7 percent in the previous financial year.
The report highlights that Jharkhand, along with several other states, has relied on borrowing rather than reducing its expenses. As a result, the economic condition of these states is deteriorating day by day.
The report reveals that out of the total debt of INR 96,406 crores, INR 66,136 crores is in the form of cash loans, INR 7,993 crores is owed to the central government, INR 1,001 crores to the Small Savings Fund, and INR 29,950 crores is in the form of Public Account funds.
The audit report of the Principal Accountant General for 2020-21 states that the total debt, including internal and external loans, stands at INR 74,538 crores. This includes INR 3,246 crores received from the central government, INR 6,594 crores in cash, INR 5,000 crores at interest rates ranging from 6.87 to 7.35 percent, and INR 1,594 crores borrowed from financial institutions.
The report also highlights that the Jharkhand government has to allocate a significant portion of its revenue towards servicing debt, which amounted to over INR 11,000 crores in 2020-21, putting additional strain on the pension liabilities as well.
In the budget for 2020-21, Finance Minister Dr. Rameshwar Oraon had stated that the government would not take on new debt and would strengthen internal resources, increase revenue, and become interest-free.
However, in the first nine months of 2020-21, the government’s revenue collection fell below 50 percent of the target, and a significant portion of the total debt of INR 96,406 crores remains pending, with a deadline for full repayment by 2038.
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