Financial Daily from THE HINDU group of publications
Thursday, Nov 17, 2005
Financial Daily from THE HINDU group of publications Thursday, Nov 17, 2005 |
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Industry & Economy
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Economy Karnataka's debt service estimated at Rs 385 cr Our Bureau
Bangalore , Nov. 16 KARNATAKA's debt service on Central borrowings and State development loans falling over the next three months (between November and January this fiscal year) is estimated at Rs 385 crore. The repayment schedule included both principal and interest on the loans, sources said. For the whole of this year, the overall repayments are estimated Rs 1,271 crore. Karnataka's debt due to the Centre is estimated at Rs 10,883 crore. Borrowings from the market in the form of State Development Loan (SDL) are estimated at Rs 9,653 crore. The sources said that some of the loans would be refinanced with fresh SDLs. SDLs are sovereign guaranteed borrowings by State Governments. However, in addition the debt servicing obligations of the State also included loans taken from financial institutions (FI). Dues to FIs are estimated at Rs 10,180 crore for the current fiscal. These loan repayments are being met out of the revenue receipts. However, sources said that the State had suffered a shortfall in the revenue receipts due to the switch over to the value-added tax regime. The shortfall is estimated at Rs 600 crore for the current year. Accordingly this was expected to be partially offset by compensation from the Centre. Yet despite this compensation, the sources said, Karnataka was likely to suffer slippages in fiscal targets. Fiscal targets estimated for the current financial year is 2.86 per cent for the gross State domestic product. The slippages were likely on account of tax shortfalls and high expenditure. Expenditure increases have taken place on account of higher outflows on salaries and wages due to dearness allowance revisions.
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