Gujarat in deep debt: Chidambaram
Gujarat falls among the six states which are classified as highly indebted along with West Bengal, Punjab, Rajasthan, Kerala and Maharashtra, Mr Chidambaram said.
By TNN |
AHMEDABAD: Finance minister P Chidambaram on Friday questioned the very basis of the Narendra Modi government’s claim of a higher growth rate by making it known that Gujarat was one among the six states which are “classified as highly indebted.”
“Due to the high borrowings, Gujarat falls among the six states which are classified as highly indebted along with West Bengal, Punjab, Rajasthan, Kerala and Maharashtra,” Mr Chidambaram who was here to campaign for the Congress told journalists at a news conference here.
Mr Chidambaram said the state was following a wrong model: “Gujarat’s model of running finances is poor. Gujarat has a debt burden of Rs 94,000 crore which wasonly Rs 45,301 crore in 2001-02. Gujarat has borrowed beyond its capacity.” Modi’s generation will not be affected but it will affect future generations of the state. In the long run, these borrowing will badly damage Gujarat’s interests.”
“Moreover, there is no inclusive growth in the state,” By following such a model, he said, “the poor and weaker sections of Gujarat have been hurt very badly. Interests payments alone consume 23.5 per cent of the revenue of Gujarat. Gujarat finances its plans by borrowing. Borrowing is not bad, but you cannot borrow beyond your capacity.”
“Is this the way to finance expenditure? In my view it is not the way. The way to finance expenditure is by better tax administration and better tax collection. Gujarat is the 17th state among 18 large states in terms of statutory expenditure in the social sector. It spends only 31.6%of its budgetary expenditure on social sector,” he said adding “new states like Chattisgarh, Jharkhand, Uttaranchal spend more on the sector. The dangers of continuing with such a government are too great, too damaging,” he said while appealing the people of Gujarat to vote out the Modi government from power.
When asked what Congress will do to wipe out the debt burden, Chidambaram said, “nobody can wipe out the accumulated debt overnight. But debt can be wiped out by reducing borrowing, improving tax administration and cutting back wasteful expenditure.”
On Modi’s claim that the BJP government has not been receiving central assistance, Chidambaram said, “Gujarat has received more than any other states in the country’s history during the last four years. We have helped Gujarat secure unilateral and bilateral funding,” he said adding that Gujarat has received funding from ADB and World Bank, Netherlands government and KFW Germany.
“The funding would not have been possible without the help of the central government,” the finance minister said. The finance minister accused Mr Modi of pursuing a “divisive, sectarian, narrow, partisan and communal agenda. Instead of uniting the people of Gujarat, sending a message of reassurance to all and speaking for the people of the state, Narendra Modi has pursued a divisive, sectarian, narrow, partisan and communal agenda,” he said.
“Due to the high borrowings, Gujarat falls among the six states which are classified as highly indebted along with West Bengal, Punjab, Rajasthan, Kerala and Maharashtra,” Mr Chidambaram who was here to campaign for the Congress told journalists at a news conference here.
Mr Chidambaram said the state was following a wrong model: “Gujarat’s model of running finances is poor. Gujarat has a debt burden of Rs 94,000 crore which wasonly Rs 45,301 crore in 2001-02. Gujarat has borrowed beyond its capacity.” Modi’s generation will not be affected but it will affect future generations of the state. In the long run, these borrowing will badly damage Gujarat’s interests.”
“Moreover, there is no inclusive growth in the state,” By following such a model, he said, “the poor and weaker sections of Gujarat have been hurt very badly. Interests payments alone consume 23.5 per cent of the revenue of Gujarat. Gujarat finances its plans by borrowing. Borrowing is not bad, but you cannot borrow beyond your capacity.”
“Is this the way to finance expenditure? In my view it is not the way. The way to finance expenditure is by better tax administration and better tax collection. Gujarat is the 17th state among 18 large states in terms of statutory expenditure in the social sector. It spends only 31.6%of its budgetary expenditure on social sector,” he said adding “new states like Chattisgarh, Jharkhand, Uttaranchal spend more on the sector. The dangers of continuing with such a government are too great, too damaging,” he said while appealing the people of Gujarat to vote out the Modi government from power.
When asked what Congress will do to wipe out the debt burden, Chidambaram said, “nobody can wipe out the accumulated debt overnight. But debt can be wiped out by reducing borrowing, improving tax administration and cutting back wasteful expenditure.”
ADVERTISEMENT
On Modi’s claim that the BJP government has not been receiving central assistance, Chidambaram said, “Gujarat has received more than any other states in the country’s history during the last four years. We have helped Gujarat secure unilateral and bilateral funding,” he said adding that Gujarat has received funding from ADB and World Bank, Netherlands government and KFW Germany.
“The funding would not have been possible without the help of the central government,” the finance minister said. The finance minister accused Mr Modi of pursuing a “divisive, sectarian, narrow, partisan and communal agenda. Instead of uniting the people of Gujarat, sending a message of reassurance to all and speaking for the people of the state, Narendra Modi has pursued a divisive, sectarian, narrow, partisan and communal agenda,” he said.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
