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Amid all routine pandemonium in the Uttar Pradesh assembly, wherein Budget Session is on, the Akhilesh Yadav government has managed to tame both fiscal deficit and public debt below the mandated levels.
Both the critical fiscal management parameters have remained flat for 2014-15 (as estimated in budgetary proposals) compared to 2013-14.
The public debt has been estimated at about Rs 2,65,902 crore during 2014-15, which is 27.8 per cent of the estimated Gross State Domestic Product (GSDP) of Rs 9,55,953 crore.
During 2013-14, the public debt stood at Rs 2,36,795 crore (revised estimates), which was 27.7 per cent of the GSDP at Rs 8,55,135 crore.
This could be termed commendable in view of the target of Fiscal Responsibility and Budget Management Act (Second Amendment), 2011 to contain it to 41.9 per cent by 2014-15 end.
The public debt mainly accrues from market borrowings, small savings, provident and pension funds, deposits and advances, loan from financial institutions, power bonds, loan from Centre etc. In recent years, market borrowings have account for 35-40 per cent of public debt for the state.
| UP fiscal deficit and public debt table | |||||
| Gross State Domestic Product (in Rs cr) | Fiscal Deficit (in Rs cr) | Fiscal Deficit % to GSDP | Public Debt (in Rs cr) | Public Debt % to GSDP | |
| 2010-11 | 5,74,124 | 17,248 | 3 | 1,96,640 | 34.3 |
| 2011-12 | 6,37,789 | 15,432 | 2.42 | 2,09,227 | 32.8 |
| 2012-13 | 7,28,342 | 19,238 | 2.64 | 2,25,124 | 30.9 |
| 2013-14 | 8,55,135 | 25,382 | 2.97 | 2,36,795 | 27.7 |
| 2014-15 | 9,55,953 | 28,411 | 2.97 | 2,65,902 | 27.8 |
| Source: UP Budget 2014-15 tabled in assembly | |||||
Besides, the fiscal deficit estimated in the annual financial statement (budget in common parlance) for 2014-15 is Rs 28,411 crore, which is 2.97 per cent of GSDP, below the mandated level of 3 per cent of GSDP. Last year, the fiscal deficit stood at Rs 25,382 crore which was also 2.97 per cent of GSDP.
While this reaffirms fiscal prudence by the government and the finance department mandarins, UP has the propensity to utilise borrowed funds for servicing debt. During 2008-11, the government had used 92 per cent of its borrowed funds for discharging debt liabilities, as per the Comptroller and Auditor General report.
Besides, fiscal deficit has been kept lower in previous years mainly due to low capital expenditure, which again is not healthy for long term development prospects of UP, which supports a population base of over 200 million.
