Follow us on

|

State debt

Rising burden

Print edition : Jul 01, 2022 T+T-
Several States are hamstrung by increasing interest payments and many are staring at shrinking avenues for boosting revenue.

Rising interest payments are a common feature for several States, according to a study of State finances by Roopal Suhag and Suyash Tiwari of PRS, a New Delhi-based think tank, in November 2018.

Maharashtra has been topping the list for the past five years, while the Budget Estimate for 2016-17 showed that the top 12 States all had interest payments in excess of Rs.10,000 crore.

For 2016-17, Uttar Pradesh was at second spot, followed by West Bengal, Tamil Nadu and Rajasthan. The total burden on all States rose from Rs.150,470 crore in 2012-13 to an estimated Rs.254,249 crore in 2016-17.

According to the NITI Aayog’s revised estimate for 2015-16, Maharashtra was the topper in own tax revenue, with an estimated Rs.1,30,580 crore for 2015-16, followed by Tamil Nadu, Uttar Pradesh, Karnataka and Gujarat. The own tax revenue generated by all States rose from Rs.5,57,400 crore in 2011-12 to Rs.9,32,210 crore in 2015-16.

The PRS study said that in 2018-19, Goa, Haryana, Punjab, Kerala, Rajasthan, Jharkhand, Chhattisgarh, Assam, and Orissa expect to generate more than 10 per cent of their revenue through non-tax sources.

The major sources for the States are interest receipts, police and administration (including fines and fees), lotteries, royalties from mining industries and revenue generated from other industries.

In Goa, 66 per cent of the non-tax revenue is expected to come from the sale of electricity and 12 per cent from mining industries.

Kerala and Punjab are estimated to get 84 per cent and 71 per cent of their non-tax revenue from general services, respectively, while Jharkhand, Chhattisgarh, and Odisha expect 78 per cent, 73 per cent, and 69 per cent of non-tax revenue to come from industries, respectively.

Media