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Our Bureau

Thiruvananthapuram, March 5 Kerala’s debt burden and per capita debt liability have been on the rise causing serious concern to the State Government.

The total debt of the State, comprising internal debt, treasury savings and provident fund and loans and advances from the Centre, increased from Rs 11,420.91 crore in 1996-97 to Rs 57,138.71 crore in 2007-08 (budget estimates), according to the Economic Review-2007 brought out by the State Planning Board.

What is worrying the Government is that while a significant portion of the debt burden went towards the financing of State plan in the past, in recent times a substantial portion has been used to bridge the gap between non-plan revenue receipts and expenditure.

Consequently, the Balance of Current Revenue becomes negative and the plan size getting increased every year results in higher borrowings for financing the plan. However, the growth rate of debt, which was 9.67 per cent in 2005-06, came down to 8.59 per cent in 2006-07.

During 2006-07, interest, pension and salary, which are the major items coming under non-plan expenditure of the State, accounted for 77.7 per cent of the total revenue receipts. The rate of growth of interest in 2006-07 over the previous year was 10.28 per cent. Pension grew at a rate of 15.15 per cent, while salary rose by 18.54 per cent.

In terms of debt/GSDP ratio, Kerala topped the neighbouring States and all-States average. The debt/GSDP ratio of Kerala in 2005 stood at 42 per cent, while that of the neighbouring States and all States ranged between 27 per cent 38 per cent.

The per capita debt of Kerala, which was Rs 7,414 in 2001, increased to Rs 12,681 in 2005 as against all-States level of Rs 8,343. Among the neighbouring States, the per capita debt of Andhra Pradesh in 2005 was Rs 8,427, that of Tamil Nadu Rs 7,782 and that of Karnataka Rs 7,446.

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