West Bengal’s per capita debt rises to Rs 59,000 in FY 2022-23

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• As per the statistics of the state finance department and the latest CAG report, West Bengal’s per capita debt rises to Rs 59,000 in the Financial Year 2022-23.

• This means that if all the people of West Bengal contribute money to meet the government debt, we will have to pay 59 thousand rupees per person.

Bengal's per capita debt

West Bengal’s per capita debt

• Per Capita Debt in the current financial year of 2022-23: Rs 59000

• Per Capita Debt in the financial year of 2010-11: Rs 20,530

• Thus, per capita debt was Rs 38470 lower in 2010-11 than in 2022-2023, the last year of 34 years of Left Front rule in the state.

Accumulated Debt of West Bengal

• The accumulated debt of West Bengal on March 31, 2022: Rs 5.28 lakh crore.

• The accumulated debt of West Bengal in the financial year 2022-23 is: Rs 5.86 lakh crore

• During the Left Front rule in Bengal the total accumulated debt was Rs 1.97 lakh crore as on March 31, 2011.

Per Capita Debt Trends in West Bengal

• As per the statistics of the state finance department and the latest CAG report, West Bengal’s debt to the gross domestic state product (GSDP) ratio for the financial year of 2020-21, the latest available on this count, reached an alarming level of 37.05 percent up from 35.68 percent in 2018-19.

• According to economists this rising trend of accumulated and per capita debt is pushing West Bengal towards a much bigger threat.

“What I am scared of is that going by the trend West Bengal is inching towards a debt to GSDP ratio of around 50 percent which is the debt trap situation which means that fresh debts will be utilized only to service the older debts,” said professor of economics, Santanu Basu.

• According to economists, this is due to increased market borrowing by the state government over the last ten years. If this trend continues, it is clear that this debt to GSDP ratio will further increase considering that the state government has no alternative source of revenue generation without state excise

What is market borrowing by government?
• The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills.

What does debt per capita mean?

Per capita debt is a measure of the value of government debt expressed in terms of the amount owed to each citizen under the government’s jurisdiction.

• It is simply calculated by the total debt of a country or other jurisdiction divided by the population living there.

• Debt per capita can give an indication of how leveraged the government in question is.

• It is often used to make a political statement about the current fiscal policy of the government rather than a true economic indicator.

How does debt per capita calculate?

• The formula for debt per capita is:

Debt Per Capita = (Short-Term Debt + Long-Term Debt) / Population

• For example, if a state with a population of 100 people has a total debt of Rs- 500, then the per capita debt is:

☛ Debt Per Capita = 500 / 100 = 5 [Rs. 5 per person ]

• Again, these figures are usually used in domestic politics to compare with the previous government, forcing the current government to make some changes in fiscal policy.

State with highest debt burden

• The Reserve Bank of India identified 10 states with the highest debt burden.

• According to the estimated budget for 2022-23, these 10 states account for almost half of the total expenditure of all state governments in India.

• These 10 ststes are:

  1. Punjab
  2. Rajasthan
  3. Kerala
  4. West Bengal
  5. Bihar
  6. Andhra Pradesh
  7. Jharkhand
  8. Madhya Pradesh
  9. Uttar Pradesh
  10. Haryana
Bengal's per capita debt

West Bengal’s debt to the gross domestic state product (GSDP)

• The state’s debt to GSDP ratio in 2022-23 was projected at 34.2 percent, down from about 37.1 percent in 2020-21.

• The state expects its economy to grow 11.5 percent to Rs 17.1 lakh crore and its debt to rise 10.9 percent to Rs 5.86 lakh crore in the current fiscal.

• The RBI survey projected that West Bengal’s fiscal position would deteriorate. It expects the debt-to-GSDP ratio to deteriorate to 37 percent in 2026-27.

Frequently Asked Questions (FAQ)

Q1. What is the per capita debt of India with respect to external debt?

Answer: 437 US Dollars

Q2. What country has the most debt per capita?

Answer: United States

Q3. What is the rank of West Bengal in terms of GDP?

Answer: 6th

Q4. Which state is the highest debt in India?

Answer: Rajasthan (39.8 percent)

[Category: West Bengal Current Affairs (Recent Topic)]

• Also See, Joka-Taratala Metro: Fare, Time, Schedule, Station

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