The new regime in Bihar has promised a bounty of jobs in the State, presumably Govt jobs.
The State is already suffering from a high debt and high deficit situation, and 80% of revenue of the State comes from the Union Govt (the highest for any state).
The State is already suffering from a high debt and high deficit situation, and 80% of revenue of the State comes from the Union Govt (the highest for any state).
Bihar, Kerala, Punjab, Rajasthan and West Bengal are highly fiscally stressed states that have no room to increase expenditure, without increasing the Revenue.
These States already have cut down on the Capital expenditure, which is bad for the future of the States.
These States already have cut down on the Capital expenditure, which is bad for the future of the States.
In 2022-23, Punjab is estimated to spend 70% of its budget in committed expenditure (salaries, interest payment), leaving only 30%.
Of that 30%, majority is revenue expenditure (e.g. Rs 6947Cr for free power to farmers) leaving no money for education, health, roads and bridges
Of that 30%, majority is revenue expenditure (e.g. Rs 6947Cr for free power to farmers) leaving no money for education, health, roads and bridges
Debt and deficit per se is not bad if it's used for creating assets and increase productivity. Like you taking home or education loan.
Debt and deficit is bad, if it is used for revenue expenditure, like salaries, subsidies. It's like you taking credit card debt for vacations.
Debt and deficit is bad, if it is used for revenue expenditure, like salaries, subsidies. It's like you taking credit card debt for vacations.
See how Uttar Pradesh has stepped up the capital expenditure for creating new expressways, medical colleges etc.
UP's own Tax revenue as a %age of revenue receipts has improved from 35% in 2019 to 48% in 2022. In the same period, for Bihar, it deteriorated from 25% to 20%.
Punjab will have tough days ahead as the Revdi politics of AAP will breakdown the already fiscally stressed state having high deficit and high debt.
Only a revenue surplus Delhi can afford the profligacy of AAP. Gujarat too can, but not Punjab.
Only a revenue surplus Delhi can afford the profligacy of AAP. Gujarat too can, but not Punjab.
Oh god! never thought that the revenue surplus Delhi could come to this!
Now a Delhi Govt funded college cannot disburse full salary to the staff, because of paucity of funds!
AAP ca n do any miracle
Now a Delhi Govt funded college cannot disburse full salary to the staff, because of paucity of funds!
AAP ca n do any miracle
It's only fair that in a democracy, people get the Govt that they deserve.
However, what is unfair is that the voters vote for the Govt that creates the liability for the future generations to come.
However, what is unfair is that the voters vote for the Govt that creates the liability for the future generations to come.
This mountain of debt that AAP Govt in Punjab is creating will have to be services by the children of Punjabis, for decades to come.
In a democracy, voters get the Govt that they deserve, but should the children be punished for their parents' choices?
In a democracy, voters get the Govt that they deserve, but should the children be punished for their parents' choices?
Fiscal profligacy is good, when used for asset creation, Infra build, capability building, as the asset can pay for itself many times over.
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