Chhattisgarh, a state in central India, has seen a significant increase in its debt burden in recent years as the Congress-led government led by Bhupesh Baghel continues to take on loans in its pursuit of fulfilling election promises. The state’s debt has increased by over Rs 54,000 crore ($7.5 billion) in the past four-and-a-half years alone, with the current total debt standing at over Rs 84,000 crore ($11.6 billion) and interest payments totaling Rs 460 crore ($63 million) per month. The Baghel government, which came to power in 2018, has already waived off farmers’ loans amounting to Rs 9,278 crore ($1.3 billion) and irrigation loans of about Rs 500 crore ($69 million) to fulfill election promises. It has also provided subsidies of about Rs 6,000 crore ($828 million) to farmers and increased the minimum support price of paddy to Rs 2,500 ($34) per quintal.
The measures taken by the Baghel government to provide financial assistance to farmers and the landless have improved the state’s rural economy, with a fair price being paid for crops and unemployed youth receiving an allowance of Rs 2,500 per month. However, the Covid-19 pandemic of the last two years has made generating revenue a challenge and forced the state government to borrow more, leading to a substantial increase in Chhattisgarh’s debt burden.
Despite the increase in debt, the Baghel government is set to announce a surplus budget soon, thanks to its efforts in providing employment opportunities in the state. The economic transformation is evident from the growth of sales of two-wheelers and four-wheelers, with several new showrooms of vehicle companies opening up in the state. Additionally, to gain support from state government employees, the Baghel government is also implementing its pledge to restore the Old Pension Scheme, which will reflect on the state exchequer once those recruited after 2003 start retiring.
While some believe the Baghel government’s loans have been necessary to fulfill election promises that the BJP government failed to keep, others argue that the Congress-led government is involved in corruption scams and commissions. The BJP claims that the annual budget of Chhattisgarh during its rule was Rs 90,000 crore ($12.4 billion), compared to the Congress rule’s Rs 6,000 crore ($828 million). Nevertheless, the fact remains that Chhattisgarh is indebted to the tune of over Rs 84,000 crore ($11.6 billion), and its government is walking a tightrope to fulfill election promises and generate revenue while keeping the state’s economic health intact.
