Gujarat has been growing at more than 10%, but the state's debt has also zoomed in the past few years. In fact, the state's debt as percentage of the total revenue is the second highest in the country, second only to West Bengal, according to a report by the Reserve Bank of India (RBI).
RBI's study of State Budgets shows that Gujarat's public debt (total liabilities) as percentage of the total revenue receipt is significantly higher than the national average and also that of the other industrialised states such as Maharashtra and Tamil Nadu.
Gujarat's public debt was 288.7% of the total revenue receipt of the state's budget estimates for 2009-10, the second highest in the country after West Bengal which had a corresponding figure of 398.6% The national average for the year was at 203.5%.
Punjab's public debt as percentage of revenue receipt was 266, while Maharashtra's was 233.3. The RBI data shows that Gujarat's public debt as percentage of total revenue has fallen significantly from the peaks of 2003-04 and 2004-05, when it was in the region of 350.
The study also shows that the debt level as compared with the revenue receipt has fallen sharply in the case of other states in the last two to three years, but it as moved up marginally in Gujarat's case in the same period.
The state's public debt as percentage of revenue receipt was around 281 in 2007-08 and 2008-09, when the state ranked third among all states. The high level of debt may be worrying, but state finance minister Vaju Vala is fine with it. "The state's public debt is under control. The state's debt is going up because of increased developmental spending," Vala had said after presenting the budget on February 25.