As Gujarat’s Finance Minister Nitin Patel is going to present the state Budget for the ninth time in the state legislature on Wednesday, the Rs 50,000 crore that the state government borrowed during the ongoing 2020-21 fiscal will be on the back of his mind.
On an average the state government’s gross borrowing has been in the range of Rs 35,000-40,000 crore. Of these Rs 15,000-20,000 crore is used for the repayment of earlier loans (principal amount). This year, due to the Covid-19 pandemic, the borrowings have almost touched Rs 50,000 crore.
“The shortfall in revenues that occurred in the months of April and May 2020, has still not been recovered, and the gross borrowings have touched Rs 50,000 crore,” an official said.
In May 2020, the Centre had raised the borrowing limits for states for the current fiscal to five per cent of the Gross State Domestic Product (GSDP), from the earlier three per cent. This was done to allow states to borrow more from the market to finance pandemic-related expenses.
The Gujarat government in the ongoing Budget session will be tabling The Gujarat Fiscal Responsibility (Amendment) Bill, 2021 which will replace an existing ordinance, which allows additional borrowing for the state.
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