Jagan Sets New Records In Getting Indiscriminate Debts

Monday, June 24, 2024

Chief Minister YS Jaganmohan Reddy has become notorious in financial mis-management and bringing undisclosed debts at a massive scale. During the first two months of this financial year, otherwise the last two months of his five-year term he has set a new record in incurring unimaginable debts.

In the first two months, the officials of the finance department have made a plan to pay the arrears of the last financial year and have waved the green flag for bad debts. In the months of April and May this year, the total open market debt has reached alarming Rs 21,000 crore.

 In the past, there were no instances of borrowing exceeding s. 5,000 crores per month on an average. During Jagan’s government, they reached Rs. 7,000 crores per month and created a record. It is noteworthy that in the current financial year alone, Rs 10,000 crore of loans per month have been collected.

If the record was Rs. 10,000 crores in April, it was increased to Rs. 11,000 crores in the month of May. If this is the case, the open market loan alone will exceed Rs. 1 lakh crore for the entire year.

At the end of March, the state government sent an indicative calendar to the Reserve Bank. It informed how much loan will be taken every week in the first three months. The state government’s proposals to take a loan of  Rs 13,000 crores in April and Rs. 5,000 crores in May.

But actually they are creating debts of Rs 21.000 crores. On the last Tuesday of this month, on May 28, the government sent a letter to the RBI asking for another Rs. 2,000 crore loan. If we add that, the debt will reach alarming level of Rs 21,000  crores in the first two months of this financial year.

The Center fixes the credit limit for the first nine months of every financial year. This time permission was given for the first six months only. The amount of these debts is calculated on the basis of estimates of the state’s gross product.

There are also instances of gross production being inflated and approvals for additional borrowings being obtained. Most of the payments of the previous financial year have been kept pending by the Jagan government. Part of the plan is to pay them off with new year debts.

The government itself has accepted that it has prepared a plan to give Rs 14,000 crores to various DBT schemes in the current financial year. The Center has given Rs 47,000 crore loan approvals in six months. Based on that calculation, there is a possibility of taking a loan of up to Rs 8,000 crores per month.

 It is noteworthy that it goes beyond that and brings more debts. On the other hand, in the financial year 2023-24, the revenue received by the state in the form of own taxes is up to Rs 1.30 1 lakh  crores. That is an average of Rs. 10,800 crores per month. The government, which is incurring huge debts in excess of tax revenue, is not looking for ways to meet them.

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