Tamil Daily Dinamalar reports that state debt reached One Lakh Crore. This is not larger than 2G spectrum loss but gets alarmingly closer 25% of state's GDP which is the maximum allowed by Central Government. The sad thing is DMK Government wastes its revenue for freebies and borrows heavily for any development. Growing debt will eventually increase borrowing cost and hinder the future growth. This could be painful.
Let us see the debt load for past few years.
2009 debt - 74,858 crores
2010 debt - 89,149 crores
2011 debt - 1,01,628 crores
The major revenue sources
Liquor tax - 7,508 crores
Petrol tax - 6,000 crores
Commercial tax - 26, 851 crores
Stamp duty - 4,096 crores
Motor vehicle Tax - 2,400 crores
Other Tax - 41,438 crores
Non Tax revenue - 4,101 crores
State share from Central - 10, 401 crores
The total revenue is about 1,02,795 crores.
The Government spends about 51% of its total revenue on salaries and pension alone. This is pretty much fixed cost and cannot back down on this. The rest of the money is spent on Free TV, Free Gas, One rupee rice, Pongal gift, Free electricity,etc.
The Government spends money on Karunanidhi dream projects such as new assembly building, Housing for cine workers (BTW, it is free), World Classical Tamil Meet, etc. The Government heavily borrows for visionary projects such as Metro Rail, Oganakal Water Project, etc. This restricts Government ability to borrow further and current projects move slowly. This also impedes any new project which could be beneficial to state.
The unfortunate fact is current Government spends its revenue recklessly without any longtime vision. (There may be family financial goal to reach) If the trend continues, the debt could easily double (2 lakh crores) in next five years with a conservative estimate. This will happen without any significant growth. This will be disastrous to the state welfare. The only solution is fix the mismanagement of Government funds which will include some painful decisions.
The current five year plan mandates the following
Overall GDP growth of 9%
Agricultural related growth 4%
Industrial growth 9.2%
Service sector growth 10.1%
20 lakh new jobs.
None of the above goal achieved towards the end of 4th year of current five year plan.
It may be interesting to compare how much Karunanidhi Family assets grown while Government is borrowing. We should also consider how much wealth is accumulated by those MLA/MP/Ministers during this period as well.
Can the public wake up and change the trend?
No comments:
Post a Comment