State spent 25 pc of borrowings to repay just debts

In a shocking find by the Comptroller and Auditor General (CAG), the Tamil Nadu government, in 2018-19, has spent more than 25 per cent of the total borrowings for paying the debts obtained in the previous years.
State spent 25 pc of borrowings to repay just debts
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According to the CAG report, tabled in the Assembly, the state borrowed Rs 47,936 crore and out of the total amount Rs 24,310 crore was used to pay the interest for loans obtained in the previous years. In the remaining amount Rs 15,064 crore was used to pay the debt and only Rs 8,562 crore was used for implementing welfare schemes. After state Finance Minister Palanivel Thiyagarajan complained that the previous state government headed by AIADMK failed to table three CAG reports in the past, the CAG reports for the year 2018 and 2019 were tabled in the Assembly on Thursday. In the report, CAG has mentioned that the net debt availability decreased mainly due to the increase in repayment of public debts which rose form Rs 8,991 crore in 2017-18 to Rs 15,064 crore in 2018-19 resulting in increase in fiscal liability from Rs 3.26 lakh crore to Rs 3.68 lakh crore.
Similarly, in the same fiscal year, the revenue deficit increased from Rs 6,408 crore in 2014-15, which was 0.6 per cent of Gross State Domestic Product (GSDP) to Rs 23,459 crore, which is 1.41 per cent of GSDP. Fiscal deficit also increased from Rs 39,840 crore in 2017-18 to Rs 47,335 crore in 2018-19, which is 2.84 per cent of GSDP. The high fiscal deficit of Rs 47,335 crore when compared to the capital expenditure of Rs 24,311 crore indicates that the borrowing during the year was utilised for revenue expenditure thereby according less priority to capital expenditure

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