With industrial & infrastructure development, loan burden also increased in UP : State Finance Commission

There has been an unprecedented increase in infrastructure and industrial development in Uttar Pradesh in the past several years, but along with these, the burden of loans taken from various institutions has also increased.

So far in the current financial year, every person in UP has a loan of about Rs 37,500. In five years, the loan on UP is estimated to increase from Rs 6 lakh crore to Rs 9 lakh crore.

Advertisement

According to the State Finance Commission, despite this, the revenue deficit of the government is 2.97 per cent, which is within the prescribed limits of the RBI. This is the reason that the size of the budget has also almost doubled in five years.

According to the latest report of the State Finance Commission, the burden of borrowing on the state is an indicator of development, because the more the expenditure is on infrastructure development, the more the debt increases. The condition is that this expenditure should be made under a transparent management policy. That is, not the size of the loan, but its use and repayment plan are more important.

According to the Finance Commission, the total debt of the state government in 2023-24 was around Rs 7.76 lakh crore, which is estimated to cross Rs 9 lakh crore in 2025-26.

UP’s estimated fiscal deficit in FY 2025-26 is Rs 91,400 crore, which is about 2.97 per cent of the state’s GDP. This deficit is within the limit of 3 per cent prescribed under the Central Government Act. This makes it clear that the state government has maintained financial discipline.