CAG flags state’s rising public debt

The public debt-GSDP (gross state domestic product) ratio of Bihar increased from 25.47% in 2019-20 to 32.78% in 2023-24, which indicates entailing risk in debt stabilisation, warns the report of the CAG of India for the year 2023-24, tabled in Bihar Vidhan Sabha during the Monsoon Session.

- ArunKumar

“As per the debt stabilisation analysis, the public debt of the Government of Bihar has grown on an average ata rate of 17.30% annually of the outstanding public debt between 2019-20 and 2023-24,” itsays.

Though the fiscal liabilities of the state government satisfied the condition of debt sustainability, except in 2019-20 and 2020-21, the report flags that a substantial proportion of public debt receipts was being used for repayment for borrowings, which ranged between 68.82% and 75.77% during 2019-2024.

“In 2023-24, the State achieved revenue surplus after 2018-19; fiscal deficit was 4.17% as against the limit of maximum 3.50% and total outstanding liabilities were 38.94% as against limit of 40.40%,” it says.

The BFRBM Act prescribes certain limits within which revenue deficit, fiscal deficit, debt as a percentage of the GSDP should be.