Madhya Pradesh Government Plans Rs 5,000 Crore Borrowing Amid Rising State Debt

Image Source : Hindustan Times

The Madhya Pradesh government is set to take its first loan of 2025, with plans to borrow Rs 5,000 crore on February 18. This move comes as the state's total debt reaches Rs 4.26 lakh crore, reflecting a steady increase in liabilities over the past financial years.

Officials have indicated that the government has space to borrow an additional Rs 25,000 crore within the current financial year. While the borrowing limit is yet to be fully exhausted, the administration is expected to take further loans based on requirements.

The borrowing process requires approval from the central government, which sets loan limits based on the financial health of each state. Madhya Pradesh's debt has risen significantly, with officials acknowledging the necessity of frequent loans to fund development programs and infrastructure projects.

A substantial portion of the borrowed funds is allocated to initiatives such as irrigation projects, transport improvements, and power generation. The government maintains that these loans are essential for sustaining growth and creating long-term assets.

Despite financial constraints, the state has also allocated funds for non-essential expenditures, including the purchase of a new jet plane worth over Rs 230 crore and SUVs for ministers. Additionally, the Ladli Behna scheme, which requires Rs 1,600 crore monthly, remains a key financial commitment.

With borrowing trends continuing, Madhya Pradesh now holds over five percent of the total state debt in India. The government asserts that its financial strategies aim to balance development needs with fiscal responsibility.

Sources: Times of India, Business Today, Business Standard.