The road ahead for newly elected chief minister Bhajan Lal is challenging specially keeping in mind the tight financial situation.
According to report of Reserve Bank of India (RBI), the Rajasthan government took a debt of Rs 12,288 crore during April 2023 to August 2023 taking the total debt to Rs 5,37,013 crore – 17% rise over last year when the debt was Rs 4,58,089 crore.
The RBI data shows that the state's debt is likely to touch 36.8% of the total GDP as per 2023-24 budget estimates, which is an alarming situation. In last 10 years, the state debt has never been less than 30% of the state GDP except in the fiscal 2014-15, when it was 15%. In last two years government has spent excessively on freebies and welfare schemes putting unprecedented burden on state finances which is already in shambles.
A study by RBI last year found Rajasthan among worst performing states in terms of fiscal prudence.
BJP announcements set to put pressure on fiscal health
In the run up to the assembly elections, BJP has announced freebies to garner votes. Now that BJP has won the elections and the government is taking oath tomorrow, the BJP will look out to fulfil its promise, which is strain the already precarious state finances.
As per the promises of BJP, the government will have to reduce prices of petroleum products including petrol and diesel to match up with the neighbouring states of Haryana and Uttar Pradesh. This will result in reducing the price by Rs 8-10 per litre. The state government accrues annual revenue of more than Rs 5,000 crore from petroleum.
BJP has also promise to give LPG cylinders at Rs 450 each to Ujjwala scheme beneficiaries besides doubling the amount in PM Kisan scheme to Rs 12,000 per year to small and marginal farmers. The party has also announced procurement to wheat at Rs 2,700 per quintal again the minimum support price of Rs 2,275 per quintal. The party has also announced hike in old age pension and scholarships for girls in its Sankalp patra.
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