Haryana's debt liability to cross Punjab's outstanding debt

BJP-led Haryana government today projected its debt liability of Rs 1,40,831 crore for the next fiscal, which is more than what neighbouring state Punjab has estimated for 2016-17.
Blaming previous Congress-led government for the state's "fiscal mess", Haryana Finance Minister Abhimanyu Singh estimated debt liability at Rs 1.40 lakh crore for 2016-17, up by 23 per cent over the debt of Rs 1.14 lakh crore (Revised Estimates) for 2015-16.
Under fire for burgeoning debt, Punjab government, in its budget presented on March 15, projected its outstanding debt liability of Rs 1.38 lakh crore for 2016-17.
Abhimanyu today presented Manohar Lal Khattar-led government's second budget in the Assembly today.

"We have inherited huge debt from previous regime," said the minister when asked about the sharp jump in debt liability.
He also ascribed rise in borrowing to the adoption of Centre's UDAY scheme for power distribution companies in which the state government would take over 75 per cent of outstanding debt of discoms (Rs 25,950 crore) to bring their fiscal health on track.

"If you set aside UDAY, then our borrowings point towards better fiscal health," he said.
He said power distribution companies' total debt is about Rs 35,000 crore with 13 per cent interest rate. "There will be reduction of 5 per cent reduction in interest rate with UDAY scheme," he said adding that it was just an "accounting entry" and power distribution companies' debt was bring incorporated into state's budget.

He said, "with the takeover of heavy debt of DISCOMS, the Government of India has waived caps provided on the debt and interest related indices under FRBM Act 2005 and recommendations of 14th Finance Commission limit for 2 years."
The state government has proposed fresh borrowings of Rs 14,937 crore for next fiscal as against borrowings of Rs 17,019 crore in the current fiscal, as per Budget at a Glance.
However, the repayment of debt has been pegged at Rs 9,677.50 crore for the next fiscal.
Debt as a percentage of GSDP ratio has been proposed at 23.96 per cent for next fiscal, up from 22.46 per cent in 2015-16 (RE), as per budget documents. In 2014-15, this ratio was 18.63 per cent.

Haryana's total borrowings including state development loan, NABARD, Ways and Means are expected to constitute 35.29 per cent of state's Consolidated Fund for 2016-17. Rest of money will come from devolution from Centre, non-tax revenue and own tax revenue.
The Finance Minister while presenting the budget proposed to set up a Debt Cash Management Cell for effective monitoring and debt management and cash flow.
"This cell will look into investment of surplus funds to maximise revenue," the minister said.