Claims State free from debt trap now
State Finance Minister Pradeep Kumar Amat on Wednesday asserted in the Assembly that the State Government had successfully overcome a debt trap of the past years through fiscal prudence and not raising any loan from open market since 2006-07.
There is nothing to worry as the loan burden is well within the Fiscal Responsibility and Budget Management Act, he told the Assembly on Wednesday.
Replying on a debate on the admissibility of an Adjournment Motion relating to the allegation that the State is burdened with huge loan and there is no sincerity by the Government to mobilise own resources to reduce the fiscal deficit and loan liability, the Finance Minister said that State had stopped raising loan from open market since 2006-07 and was repaying the high cost loan in advance.
Amat said that due to several fiscal discipline measures and deft financial management undertaken by the Government, the State was now in a financially sound position and “there was nothing to be worried.”
An amount of Rs 1,909.50 crore loan was waived by the Centre for better financial management from 2005-06 to 2009-10, while Rs 63.01 crore loan was waived in 2011-12 and Rs 22 crore was waived in 2013-14, he informed, saying that it helped the State get a respite from a huge loan liability.
The Finance Minister said the loan burden of the State was much less in comparison to the neighbouring States of Andhra Pradesh and West Bengal. While the loan burden of Odisha in 2013-14 Budget stood at Rs 43,540 crore, it was Rs 1,78,840 crore in Andhra Pradesh and Rs 2,32,610 crore in West Bengal.
Stating that the ratio between the loan and the GSDP is important in the context of fiscal sustainability, he said the ratio is less than the neighbouring States. While the loan and GSDP ratio in Odisha in 2013-14 was 14.88 per cent, it was 17.18 per cent in Jharkhand, 20.64 per cent in Andhra Pradesh, 31.33 per cent in West Bengal, 21.22 per cent in Bihar and 20.30 per cent in Gujarat, he informed.
Stating that the State was basically in a debt trap till 1999-2000, the Finance Minister said that after 2006-07, the Government had accumulated cash balance and liquidated the past liabilities especially of the Central Government loans, besides making significant improvement in fiscal balances. While the State has stopped its market borrowing and was resorting to only project linked borrowings, the dependence on loans from the Center has also come down to around 41 per cent of the total liability, he asserted.
The Minister said that Odisha had successfully availed full benefit of the Debt Consolidation and Relief Facility scheme by fulfilling all required conditions.
Participating in the discussion, the Opposition Congress Members Taraparsad Bahinipati, Bhujabal Majhi and BJP floor leader Basanta Panda alleged that the due to bad financial management, the loan burden of the State had increased from Rs 18,000 crore in 2000 to Rs 48,000 crore. The loan burden would touch around Rs 50,000 crore by end of the current fiscal, they said.
The Opposition members alleged that government was not taking any step to mobilise own resources and failing to collect the outstanding taxes on industrialists and mine owners to reduce fiscal deficit and loan burden. They alleged that while the State claimed for better financial management, still 1.5 lakh posts in Government offices were lying vacant.
On the other hand, Treasury Bench Members Amar Satapathy, Bed Prakash Agrawala and Prafulla Samal defended the Government for taking prudent steps at fiscal discipline.