The total outstanding debt of the State more than doubled in just four years from 2017-18 to 2021-22, according to State Finance Audit Report of the Comptroller and Auditor General of India. It also noted that part of borrowing was used for revenue expenditure.
According to the CAG report that was tabled in the State Legislature on Tuesday, the total debt burden of the State increased from ₹1,63,136 crore in 2017-18 to ₹3,74,427 crore in 2021-22.
Debt to GSDP ratio
The debt to GSDP ratio that stood at 10.4% in 2017-18 had increased to 19.98% in 2021-22, the report notes.
Dwelling further into borrowings, the report observes that the borrowed funds should ideally be used to fund capital creation and developmental activities. It will not be sustainable if the borrowed funds are used for meeting revenue expenditure and repayment of interest on outstanding loans. However, part of the borrowed funds were utilised towards revenue expenditure in 2021-22 as the revenue receipts were not sufficient to meet the revenue expenditure, the reports points out.
With the increase in borrowings, the interest payments too increased from ₹14,973 crore in 2017-18 to ₹26,276 crore in 2021-22, the report notes.
Jump in revenue expenditure
Similarly, the revenue expenditure of the State has increased from ₹1,78,242 crore in 2017-18 to ₹2,61,511 crore in 2021-22, which is an increase of about 50%.
The report points out that there is an increase in committed expenditure that has resulted in less space for diverting the funs for developmental expenditure. Hence it has suggested expenditure rationalisation by implementing the recommendations made by the Karnataka Administrative Reforms Commission-2 such as improving revenues of Gram Panchayats, Municipalities, Urban Local Bodies, avoiding wastage of public resources, etc.
Salary expenditure
The expenditure on salaries of government staff increased from ₹22,958 crore in 2017-18 to ₹35,560 crore in 2021-22. Similarly, the expenditure on pension stood at ₹20,666 crore in 2021-22.
Meanwhile, reference to the growth in various sectors by the report shows that the serious floods that affected food production in 2021-22 impacted the growth rate of agricultural sector itself. The growth rate of agricultural sector which had increased from 18.53 per cent in 2019-20 to 23.82 per cent in 2020-21, dropped to 14.69 per cent in 2021-22.
Published - July 11, 2023 10:32 pm IST
