Agartala: Tripura government seems to be reeling under a rapidly mounting debt burden caused by repayment of loans and hefty interest charges.
The state’s debt crossed the 20,000 crore mark, revealed the audit report of the Comptroller and Auditor General of India for 2021-2022.
In the last financial year, Rs 649 crore has been added to the total debt for borrowing and liabilities.
According to the report, in 2020-2021, public debt and other liabilities stood at Rs 21,083.10 crore, which had risen to Rs 21,732.42 crore by the end of the last financial year.
The total interest paid for the borrowings stands at Rs 1,382.67 crore.
The report said there are two types of interest being paid by the Tripura government.
The first is direct interest on public debt, small savings and provident funds which stands at 1,382.67 crore, while there is another head called other obligations.
The state government pays interest of Rs 15.49 crore for capital of Rs 1,911.80 crore under the other obligation head. This means the obligations are guaranteed by the government to the borrowers while taking the loan.
However, the net interest charges are a little less as the government also earns from the loans and advances given by it. The Tripura government received Rs 0.15 crore as loans given by it and Rs 18.48 crore was realised on the investment of cash balances.
The net interest charges for the state were found to be Rs 1,379.53 crore for 2021-22 which indicates the state government paid Rs 114.91 crore as monthly interest and the daily average interest borne by the government stood at Rs 3.83 crore.
Sources in the finance department said strict austerity measures are required to be opted to reduce the burden of debt on a state like Tripura, otherwise, the state’s financial ecosystem may get harmed seriously. Being a Northeastern state, Tripura is mostly dependent on the Centre for its finances.
According to the report, the yearly increase in debt burden was recorded to be 3.08 percent and the total repayment of Rs 3,432.62 was made in the last financial year. It may be mentioned here that the total budget of Tripura is a little over Rs 26,000 crore for the current fiscal year. For 2021-22, the budget proposal was a little over Rs 22,000 crore.
The ruling Bharatiya Janata Party has time and again held the previously ruling CPI-M party responsible for a leaving debt of Rs 13,000 crore over it but in the four years, the burden has only become heavier.
Speaking on the issue, Tripura University professor of Economics Dr. Indraneel Bhowmik said if the state could sustain its growth rate, then the debt burden could reduce.
“The growth rate of the state is higher than the interest rate it is paying for the liabilities. So at one point of time, this burden could be eased out. In addition, the second and very important aspect is the creation of larger employment scopes for people. If more people are employed that means the total output will be more which is equivalent to growth,” suggested Professor Bhowmik.
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On being asked what areas should be explored for more employment in Tripura, Bhowmik said: “In my understanding, we have plenty of opportunities in the hospitality, wellness and service sector which can create a lot of employment. I am being very specific about the connotation of the word employment because employment is a multi-dimensional thing. These sectors have higher employment linkages and that is where the growth potential is large. The government should focus on that.”
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