Govt. should repay ₹22,315 crore loans and other commitments this fiscal, says CAG

The State government will have to repay over ₹22,315 crore during the current financial year.

Of the quantum of loans, repayment of market borrowings constitutes a major chunk of ₹19,785 crore followed by loans taken from Nabard to the tune of ₹1,047 crore in addition to repayment of ₹892 crore pertaining to compensation and bonds issued by the government from time to time.

The loan quantum remains equally heavy during the next financial year 2027-28 when the government will have to repay ₹19,502 crore, according to the maturity profile of the internal debt in the form of borrowings and other liabilities. Expenditure of ₹892 crore on account of maturing bonds would continue till 2031-32, while repayment of loans obtained from Nabard will also continue till the same time.

Impact on account of repayment of market borrowings will come down for a couple of years 2028-29 and 2029-30 when the government has to remit ₹4,461 crore and ₹3,449 crore respectively but the long gestation loans with maturity starting from 2031-32 will again pose a burden on the economy with payment of over ₹8,000 crore to be made annually thereafter.

The maturity profile of the internal debt indicated in the Finance Accounts report released by the Comptroller and Auditor General of India recently indicates the pressure on the State’s finances to repay the borrowings by the previous government. The government has indicated in the budget documents of the current year that it will opt for borrowings of over ₹80,000 crore from different sources, including market borrowings of ₹73,383 crore.

“This is an indirect form of ‘ever greening’ the existing loans in that the government will repay the loans which reach maturity using the proposed loans,” a senior official told The Hindu. Of the borrowings proposed during the current fiscal, the government would spend a major amount for repayment of the matured loans, and the remaining would be used for capital works.