AMARENDRA KUMAR
Ranchi, Nov. 8: The Jharkhand government has decided to repay the loan taken at expensive rates before time. In the first phase, Rs 136 crore has been returned in a lump sum to Rural Electrification Corporation Limited (REC), National Co-operative Development Corporation (NCDC) and Housing and Urban Development Corporation (HUDCO). After this amount was paid last month, Jharkhand is now free from the debt of REC and NCDC, reports Dainik Bhashkar.
Preparations are also being made to return about Rs 200 crore to HUDCO by the last month of this financial year i.e. March. This is considered an important step towards saving the state from the loan trap. This will improve the financial situation. The government was paying up to 13% annual interest to these financial institutions on the loans that were returned. The state currently has a debt of about Rs 6500 crore at an expensive rate (10% to 13% per annum).
Of this, about Rs 6000 crore belongs to the National Small Savings Fund (NSS). An annual interest of about 13% has to be paid on this. Recently, the government had also proposed a lump sum loan repayment to the NSS fund, which it rejected. However, the state government has again started the process of pressurizing for loan repayment. At present the state has a total debt of about Rs 96,406 crore. About Rs 7400 crore has to be paid annually on its interest.
The loans returned last month include Rs 102 crore to REC, Rs 25 crore to HUDCO, and about Rs 9 crore to NCDC. At present HUDCO has a loan of Rs 500 crore on the state. A plan has been set to return around Rs 200 crore by March. The Finance Department has sought information from all the departments as to who has how much loan from HUDCO.
How it happened?
The financial position of the state has been strengthening over the past few years. The central government has also announced to provide interest-free loans to the states for 50 years. After this, the state government started repaying the expensive loans under financial management. The size of the state budget has also increased over the years. The share of revenue received from the state’s sources has also increased. The fiscal deficit has remained under control. The size of public debt is within the debt limit prescribed for the state and interest payments have been less than 10 percent of total revenue collections.
What does Finance Minister Dr. Rameshwar Oraon say?
The state government used to take loans at high-interest rates in previous years. Due to the financial condition and loan simplification system, the process of paying off expensive loans before maturity has been started. It is part of financial management that if needed, take less expensive loans and more cheap ones. The previous governments of the state have taken more loans at expensive rates. Now we are doing this to reduce the debt and interest burden. Revenue collection has also increased in this government, where earlier the income from commercial tax was Rs 15,000 to 16,000 crore. It has now reached Rs 23,000 crores. There has been growth in other departments also. The state will benefit greatly from this step of the government.
