The state of Rajasthan welcomed its new Chief Minister Bhajanlal Sharma last week. Sharma took the oath of office as Rajasthan’s 16th chief minister. Additionally, he’s made some important decisions. But much remains to be done, particularly because Rajasthan’s economy suffered considerable harm due to the previous Congress administration under Ashok Gehlot.
In Rajasthan, changing the government every five years has become a trend for the past thirty years. Nevertheless, the state’s economy has suffered each time the Congress government has taken office. The statistics indicate the same thing this time around.
Although Rajasthan has one of the highest debt-to-GDP ratios in the nation and a massive debt load, its GDP has not increased significantly over the previous five years. Apart from this, the Gehlot government’s profligacy has left the state in the throes of a severe economic crisis.
Rajasthan got buried under debt in Ashok Gehlot’s rule
Rajasthan is presently drowning in debt. A report by the Reserve Bank of India shows that Rajasthan has a debt of Rs 5.37 lakh crore by the end of the financial year 2022-23. This debt was only Rs 2.81 lakh crore in 2018 when Ashok Gehlot took over the office. Ashok Gehlot has imposed a new loan of Rs 2.55 lakh crore on Rajasthan in the last five years.
The Congress government looted the government treasury continuously to bring in new appeasement schemes and get votes. It is noteworthy that Ashok Gehlot referred to the Rs 1.63 lakh crore loan taken by the previous Vasundhara Raje government as extremely high when he took office in 2018. He is now the one who has buried the state in debt.
Rajasthan’s financial situation is appalling. This state’s debt amounts to 40% of its GDP. It shouldn’t go over 20% in any state, according to the FRBM Act, which establishes borrowing caps for the federal government and the states. However, it has doubled as a result of the Congress government’s extravagant spending.
GDP has not increased, but debt continues to rise
It’s not like accepting this loan would have allowed Ashok Gehlot to propel the state’s development in a new direction. Conversely, the economy of Rajasthan has expanded at a fairly normal rate during his tenure. When the state’s Congress government left office in 2013, Rajasthan’s GDP was Rs 4.93 lakh crore.
Under the BJP government, it rose to Rs 6.28 lakh crore by 2018. Following this, the state’s GDP was Rs 7.99 lakh crore in 2023 compared to 2018. Over these two periods, the state’s GDP grew by 27.2%. Yet, the Congress government borrowed far more money to achieve the same growth.
Income decreased, Expenses increased
The Congress government has indulged in careless expenses to carry on its appeasement policies over the last 5 years. The difference between the state’s revenue and expenses, or the fiscal deficit, has grown dramatically over the previous five years. It was Rs 25,342 crore in 2018, the year the BJP government was forced to resign, and it has more than doubled to Rs 58,212 crore when Ashok Gehlot leaves office in 2023. This represents 4.3% of the GDP of Rajasthan. The rule says it should not exceed 3%.
Ashok Gehlot has left office after taking the state’s economy on a nosedive. Under these circumstances, Bhajanlal Sharma, the new chief minister, will need to exercise extreme caution. He will need to pay back debts while simultaneously bringing the economy back to life. Apart from this, strengthening law and order will be critical to the growth of the economy.
