Thiruvananthapuram: Addressing the financial crisis, Finance Minister KN Balagopal defended the government’s borrowing, emphasizing that debt is a common aspect of the GDP, even in developed countries. Dismissing concerns about Kerala’s debt crisis, he argued against the Center’s decision to reduce borrowing limits, stating that such measures are unnecessary.
The Minister justified his stance and said that India’s current debt stands at approximately 58 percent of the GDP, with the central government’s total debt reaching Rs. 157 lakh crores as of March last year. The Reserve Bank projects that the government’s debt will account for 90 percent of the country’s GDP in 2020–21, with 65 percent attributed to the central government.
Providing a perspective on other states, Minister Balagopal revealed that Tamil Nadu’s debt is Rs. 7.54 lakh crores, Uttar Pradesh’s is Rs. 7.10 lakh crores, and Maharashtra’s is Rs. 6.80 lakh crores. West Bengal follows closely with Rs. 6.08 crores, while states like Rajasthan and Karnataka carry debts exceeding Rs. 5 lakh crores. Criticising the recent changes in the federal financial system, Balagopal voiced concerns about the challenges these modifications pose.
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