Public Debt in West Bengal –An Empirical Analysis for the Period 1990-91 to 2009-10

Abstract

In the Indian federal finance public debt is a burning issue not only for most of the states in India but also for the central government. The expenditure responsibility of the states is much higher as compared to the revenue base and revenue collection of the states. As a result the states are running with fiscal deficit and the debt and the load of debt is increasing as the debt accumulation process continues for a long period of time.

West Bengal is facing serious financial problem since last two decades. West Bengal is ranked among the states as 3rdin India on the basis of total outstanding debt. The outstanding debt to gross state domestic product ratio of West Bengal is much higher as compared to the outstanding debt of gross state domestic product to total outstanding liabilities of all the states of India taken together excluding West Bengal. The per capita debt of West Bengal is also higher as compared to the per capita debt of all states taken together excluding West Bengal. The interest payment ratio of West Bengal is also remaining unfavorable as compared to all state average interest payment in India.

In this article an attempt has been made to assess the rate of growth of outstanding liabilities during 1990-91 to 2009-10. In Section I the objectives, data collection & methodology, hypothesis and introduction of the study are discussed. In Section II the findings of the study have been analyzed.