Jaipur, March 2: In the run up to the Assembly elections in November, the Opposition BJP has decided to make the Ashok Gehlot government’s “economic mismanagement” a major poll plank.
Hari Shankar Bhabhra, former deputy chief minister in the Bhairon Singh Shekhawat government, said he was busy preparing a white paper on the issue to be released on poll eve. Bhabhra was also in charge of the state finance portfolio.
L.N. Nathuramka, an expert on Rajasthan’s economy and member of the state’s task force on management of finances, conceded the state’s economy was virtually in a debt trap.
With the state budget to be presented on March 5, observers are waiting to see how the state proposes to tackle the situation.
Going by the fiscal norms suggested by the Eleventh Finance Commission and the RBI, Rajasthan has crossed the “fiscal stress” zone; it is fast approaching the “fiscal alarm” zone with an absolute debt trap.
With no real fiscal reforms in sight, the situation may go from bad to worse over the coming years. Four consecutive droughts have added to the distress.
For the 1998 Assembly polls, the Congress had lambasted in its poll manifesto the BJP state government for depending heavily on debts for financing the Plan outlay.
The state’s debt burden was Rs 6,000 crore in 1990 when the BJP had come to power, ousting the Congress.
In 1998-99, when the Congress took over power from the BJP, the debt burden was Rs 23,000 crore. This figure will be more than doubled by this year-end, Rs 49,000 core to be specific, according to budget estimates for this financial year.
The state finances took a drastic downturn from 1998-99 when revenue deficit shot up by 415 per cent in one year from Rs 582 crore in 1997-98 to Rs 5,151 crore in 1998-99.
Nathuramka said the outstanding debt as a ratio of gross state domestic product was 40.3 per cent in 1999-2000, which shot up to 44.3 per cent in 2000-01.
It went further up to 45.2 per cent in 2001-02, and was likely to cross the 50 per cent mark in 2002-03, he said.