Maharashtra’s public debt set to hit Rs185,801 crore despite 8.6 per cent growth

Despite 8.6 per cent growth projections for 2009-10 for the Gross State Domestic Product (GSDP)-as against 3.4 per cent for the earlier financial year, Maharashtra's public debt is set to hit an astronomical Rs1,85,801 crore, or 22.3 per cent of the GSDP.

The debt is expected to surge by Rs27,281 crore over the previous year's amount of Rs1,58,520 crore with the higher borrowings the government will have to go for to cope with the revenue deficit. After a surplus for three years, the state's revenue collection is expected to face a Rs7,123 crore deficit, or 0.9 per cent of the GSDP.

''The collection from Value Added Tax (VAT) has remained the same as last year (Rs 23,291 crore for April-December 2009). Its income from taxes on goods and passengers has declined by about 3.5 per cent,'' the report states. According to analysts this explains the state government's decision to increase VAT on concessional goods from 4 per cent to 5 per cent through an ordinance.

The Economic Survey of Maharashtra 2009-10 was presented in the assembly on Tuesday, by state finance minister Sunil Tatkare in the run-up to the budget, to be tabled on Thursday.

Growth in agriculture and allied activity is expected to be 1.8 per cent as against negative growth of 19.3 per cent in the earlier year.

The agricultural production is expected to rise by 8 per cent, according to the report.