Bhubaneswar: With elections on the horizon, it is all the more likely that Odisha government will continue to depend on market borrowings to finance its welfare schemes. Experts predict that amid lack of new revenue sources, the debt burden of the State will be a problem in the long run.
In fact, Odisha is already raising money from the market at nearly Rs 1000 crore per month since the beginning of 2018.
In line with the borrowing trend, Odisha government is all set to come out with its offer to borrow Rs 500 crore from the market tomorrow.
Through a notification, the Odisha Government has announced the sale of its Stock of 5-year tenure to raise Rs 500 crore and the auction for the same will be conducted on July 24.
"As per our requirements we are borrowing Rs 500 crore from the market which will help us in strengthening our financial situation," Odisha Finance Minister, Sashi Bhusan Behera said.
However, experts are anticipating that even though there are no immediate consequences of borrowing such a massive amount, in the long run it may turn out to be a headache for the State government.
It is being estimated that by the end of this financial year, the total borrowings of the state could touch Rs 93,000 crore.
Resident editor of Business Standard, Dilip Satpathy said "If the government borrows its targeted Rs 19,000 crore, then the total debt burden will be Rs 93,000 crore. This is a matter of concern for the government and it should think about increasing its income. The pressure is very high this year due to the upcoming elections."
Opposition parties have slammed the government for failing to increase its earnings and depending on borrowings.
Senior Congress leader Sarat Rout said "In the name of development, the government will borrow funds after selling the bonds in open market and in the future it will lead to a financial crisis."
State BJP Vice-president, Samir Mohanty said "Not allocating a single paisa for some schemes is a testimony to the fact that this government is on the verge of a financial crisis."
However, the Odisha Finance Minister defended the government's decision and said that the borrowed amount of money will help in the State's growth and development.
"We are borrowing loans for income generation, financial development, and to complete unfinished projects or else there will be allegations that BJD government started the projects but was unable to complete them," Behera said.