ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Impoverishing Uttar Pradesh

In a study on the Uttar Pradesh budget for 2012-13 conducted at the G B Pant Social Science Institute, it was found that the indebtedness of the state government is now over Rs 2.5 lakh crore and is rising annually by Rs 18,000 crore. The annual repayment of debt and interest at Rs 19,000 crore and Rs 17,000 crore, respectively, takes away 60% of the state’s revenue. If we add pension payments (Rs 19,000 crore), the three items take away 90% of the state’s tax revenue of Rs 62,000 crore leaving little for any other expenditures.

Uttar Pradesh has now to depend on the centre’s tax share, grants and borrowing which limit its efforts to accelerate the development. In 2012-13 the expenditure on agriculture, land and water resource development, and rural development will be lower than in the previous year. This is alarming as the per capita foodgrain production is declining and the water table is going down rapidly making irrigation costlier and aggravating the problem of drinking water supply. Its expenditure on agriculture at Rs 3,405 crore and development of land and water resources (Rs 306 crore) constitute less than 2% of the total budget. Allocation for land and water recourses will decline by 32% in 2012-13 but outlay on the police will increase from Rs 7,594 crore in 2011-12 to Rs 10,378 crore, a rise of 37% in a single year. In fact, expenditure on the police force is now the largest item of expenditure after repayment of debt and interest. It is larger than the combined expenditure on agriculture and allied activities, rural deve­lopment, industries and minerals. Expenditure on power at Rs 8,710 crore constitutes only 4% of the total budget despite great shortage of power in the state.

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