Govt to take fresh loan of ₹5,000 cr on Feb 27

Bhopal: The govt would take a fresh loan of Rs 5,000 crore on Feb 27. The loan would be taken in three breakups. So far this month, the govt has taken a loan of Rs 8,000 crore. With the fresh loan, the total loan amount in this month will go up to Rs 13,000 crore.
The new BJP govt headed by Mohan Yadav took a loan of Rs 17,500 crore since it came into power in December.
The loan amount would further go up before the financial year ends. The state govt has inherited a debt of Rs 3.5 lakh crore. The financial position of the state could be gauged with the fact that to meet the expenses, the govt during the model code of conduct in force for the assembly polls took a loan of Rs 5,000 crore.
A sum of Rs 12,000 crore loan was taken in Sept alone — two months before elections. On Oct 18, the govt took a loan of Rs 1,000 crore. Eight days later, it took another loan of Rs 2,000 crore and on November 22, five days after voting, an additional Rs 2,000 crore.
Officials said, there is no bar on taking loans in between or after elections. In the previous years, the loan would be generally taken in the last quarter, but this year it was taken in breaks all-round the year. With a month more left for the fiscal, MP’s loan will rise, an official said.
The govt’s pre-poll announcements and schemes in the run-up to the elections were estimated to increase expenditure by at least 10%, say sources. The effect was evident.
In the first supplementary budget of Rs 26,816.6 crore passed in the assembly in July last year, Rs 762 crore was set aside to pay the interest of the new market loans taken by the government. In the second supplementary budget a sum of around Rs 1200 crore was kept for the same. Officials said, consent of the Union government is obtained for loan. Based on financial position there was a limit set to the extent of which a state government can take loan.
The loans taken by the government are utilized for financing productive development programmes and projects to be implemented in the state. It mainly bears the cost of development schemes.
Loans taken from the Govt of India and from other sources were mainly utilized 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. The cash-strapped MP government has put at least 370 schemes on hold this fiscal.