PATNA, July 28 -- The public debt-GSDP (gross state domestic product) ratio of Bihar increased from 25.47% in 2019-20 to 32.78% in 2023-24, which indicates entailing risk in debt stabilisation, warns the report of the CAG of India for the year 2023-24, tabled in Bihar Vidhan Sabha during the Monsoon Session. "As per the debt stabilisation analysis, the public debt of the Government of Bihar has grown on an average at a rate of 17.30% annually of the outstanding public debt between 2019-20 and 2023-24," it says. Though the fiscal liabilities of the state government satisfied the condition of debt sustainability, except in 2019-20 and 2020-21, the report flags that a substantial proportion of public debt receipts was being used for repayment for borrowings, which ranged between 68.82% and 75.77% during 2019-2024. "In 2023-24, the State achieved revenue surplus after 2018-19; fiscal deficit was 4.17% as against the limit of maximum 3.50% and total outstanding liabilities were 38.94% as against limit of 40.40%," it says. The BFRBM Act prescribes certain limits within which revenue deficit, fiscal deficit, debt as a percentage of the GSDP should be. The report also highlights that within the non-committed expenditure, subsidies increased from Rs.7,121.27 crore in 2019-2020 to Rs.16,244.61 crore in 2023-24 i.e., from 5.65% of the total revenue expenditure in 2019-20 to 8.53% in 2023-24. "Power subsidies constituted a significant portion of this, ranging from 72.92% to 82.77% of the total subsidies during the period," it adds. The report also points to supplementary provisions of Rs.11,042.66 crore during 2023-24 in 13 cases (more than Rs.100 crore in each case) under 13 different grants proved unnecessary. "It was noticed that in several cases, there were supplementary grants where expenditure was not even up to the original grant," it says. The overall budget reliability assessment indicates that though the deviations between the actual expenditure and original budget was only (-) 0.45%, the deviation between the actual expenditure and total budget was (-) 20.08%. "The audit report also underscores several emerging challenges in managing state finances over the coming years. These include rising debt levels, debt and interest repayment obligations, an escalating subsidy burden, and a significant mismatch between budgeted allocations and actual expenditures," said an economist, not wishing to be quoted. He said if recent trends-like growing salary outlay, increased electricity subsidies, and a surge in populist announcements linked to the election cycle-persist, the government might face serious fiscal constraints in meeting expenditure requirements after the elections and that would be a challenge for the new government to look for new avenues. Former head of department of economics, Patna University, NK Choudhary said the trend was not good for sound fiscal management and would have adverse impact in the long run both in terms of development and welfare measures. "In finance, what is important is sustainability. But most things are guided by politicians' compulsions for instant gain not only in Bihar, but across the country. This needs to be resisted as sound finance needs balancing populism with practicality and differentiating between what is urgent and what is important. Unmanageable burden on the exchequer will be good for none," he added....