Outstanding government debt will be Rs 1.12L cr by Mar 23

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The government of Odisha has estimated that its total outstanding debt as of March 31, 2023 will be Rs 1,12,401 crore, which was Rs 1,00,813 crore as of March 31, 2022.

While the total stock of government debt will increase, the future outlook for the stock of government debt appears to be at a sustainable level.

And in the medium term, the government’s total debt-to-gross domestic product (GDP) ratio is expected to reach a level of 18.1% in FY 2025-26, which will also be within the stipulated 25% limit. .

The latest statement of public debt reveals that as the state government makes full use of the public debt for capital investment, it is proving to be sustainable and the government will be well within its limit to service its debt without any difficulty.

Officials said strong revenue growth is helping the state government keep interest payments manageable and within the limits of the Fiscal Responsibility and Fiscal Management (FRBM) Act.

While the low percentage of foreign currency debt has reduced Odisha’s vulnerability to any exchange rate depreciation, Odisha’s debt to GDP ratio of 15.8% is considerably lower than the 61% gross domestic product (GDP) of India.

Chief Minister Naveen Patnaik’s decision not to go for high cost borrowing in the market has helped the state and the transition from high cost to low cost borrowing is helping the state maintain its stock of debt to a manageable level, officials admit.

Think back to the days of 2000, when Odisha used to go overdrawn for 364 days a year, and now the situation is totally different, where the state is within its stipulated debt limit.

The state government borrows from the Odisha Mineral Bearing Area Development Corporation (OMBADC) fund and the Compensatory Afforestation Fund (CAMPA), which is low cost debt.

Open market borrowing in FY 2021-22 was “zero” and in FY 2022-23 will be at the same level as cheaper sources of lending are available to the US government. State to finance investment projects.

Total loan guarantees to state PSUs, urban local bodies and cooperative institutions as of March 31, 2022 is Rs 6,140.91 crore. The amount is 0.96% of the GSDP and the guarantees are not part of the state government’s loan portfolio.

Today, almost all borrowings are used in socially beneficial investment projects that stimulate economic activities, create jobs and improve the lives of people in the state and contribute to the GSDP.

As a result, it was decided to identify good projects and selected for investment of borrowed funds, officials say.

Thus, the lower level of outstanding debt, the reduction in the cost of borrowing, the lower level of exposure to budgetary risks and the low level of outstanding public guarantees have made the State’s budgetary situation sustainable.

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