Mumbai, June 18 (IANS) The Shiv Sena Uddhav Balasaheb Thackeray on Thursday said the revelation made by the Comptroller and Auditor General of India (CAG) in its latest report regarding how all 28 states in the country, including Maharashtra, are entangled in a debt trap is deeply shocking.

The party said in its mouthpiece, ‘Saamana’, that over the last ten years, the total debt of the states has ballooned from Rs 31 lakh crore to a staggering Rs 90 lakh crore. There is a common proverb: “Celebrating a festival by taking out a loan.” For the past few years, all state governments and the Central government have been running their regimes in exactly this manner- by accumulating massive debts.

The editorial remarked that even the Central government itself is burdened with a debt of around Rs 200 lakh crore. Instead of enforcing financial discipline on the states, a literal race seems to have broken out between the Centre and the states over who can become more debt-ridden. “If the money collected from taxpayers is spent solely on paying off interest, what will happen? Where is this rising debt leading the nation’s economy? Will we wise up before this noose of debt completely destroys the country’s foundations?” it asked.

“While the CAG may have hesitated to state it directly, the bitter truth remains: fiscal indiscipline and the tendency to squander state treasuries on populist schemes to win elections have pushed state governments deeper into a debt trap day by day. Nevertheless, the CAG report deserves credit for bringing a realistic and unvarnished picture of the states’ financial crises and their mountains of debt to the nation’s attention,” the editorial said.

According to the Auditor General’s ‘Finance 2024-25’ report, the combined budgetary expenditure of all states in India stands at Rs 51.20 lakh crore, while their total debt is knocking on the door of Rs 100 lakh crore. The economic wheels of almost all states, including Maharashtra, have ground to a halt due to a combination of diminishing revenues and extravagant expenditures, massive funding required for freebie schemes, a declining graph of economic growth and the necessity of taking out fresh loans just to pay off existing interest,” said the editorial.

The editorial further stated that nearly every state in the country is currently grappling with a severe fiscal deficit. The revenue deficit of 15 states — including Maharashtra, Karnataka, Bihar, Assam, Haryana, Himachal Pradesh, Telangana, and Chhattisgarh — has reached a staggering Rs 3.46 lakh crore. These statistics clearly indicate that the financial health of these states has deteriorated rapidly over the past decade due to this vicious debt cycle.

“At a time when no Central institution seems to be functioning completely autonomously, the CAG must be thanked for presenting a report that unmasks the true financial status of the nation’s states,” it commented.

The Thackeray camp argued that states are left with virtually no adequate funds for actual development work due to a tightening debt trap and the mandatory repayment instalments. The threefold increase in state debt and the lakhs of crores spent purely on interest servicing have broken the financial backbone of the states.

The Uddhav Thackeray-led Shiv Sena said, “The hard-earned money collected from taxpayers is going to be spent entirely on servicing interest; what is the future of our nation? Where exactly is this growing mountain of debt leading the Indian economy? Will we wise up before this financial noose tightens fatally around the country’s roots, or will we not?”

“The trajectory of the national economy remains deeply worrisome,” it noted.

–IANS

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