Bhopal (Madhya Pradesh): Madhya Pradesh government can borrow around Rs 50,000 crore during the remaining months of the current financial year, with the state having so far utilised Rs 37,400 crore of its Rs 87,000 crore borrowing limit.
This leaves the state with substantial borrowing capacity for the remaining months of the financial year.
In a press statement issued on Sunday, the state government said loans are primarily being used for development works and creation of capital assets, and not for regular revenue expenditure.
The state government takes loans from time to time within the borrowing limit fixed by the Centre and also makes repayments accordingly. It uses loans in development works including irrigation, road and electricity-related capital assets.
The state government said its financial management remains strong, with cent per cent repayment of loans taken in previous years and no defaults so far. It added that no separate loans are taken for salaries or social welfare schemes such as Ladli Behana.
The government also said no improper increase in taxes has been made to raise resources for development works. The government said it would take more loans for development works in the coming months.
In the current financial year, it plans to spend more than Rs 1 lakh crore from its own resources and loans raised from different corporations and through the Reserve Bank of India (RBI) on roads, dams, electricity and canal construction.
It said the state is able to provide such a large amount for development works as its GSDP is increasing every year, which in turn enhances its borrowing capacity.
The debt-to-GSDP ratio stands at 32.53%, which is within the prevailing parameters. Likewise, the ratio of interest repayment to revenue receipts is 10-11%, which the government said is at a secure level.
