Madhya Pradesh's Rising Debt: New Rs 5,200 Crore Loan Pushes Total Burden to Rs 4.64 Lakh Crore

The Madhya Pradesh government is set to acquire another loan of Rs 5,200 crore just days before the state's Foundation Day on November 1. This decision comes under Chief Minister Dr Mohan Yadav's administration, marking the 20th loan since his government took office.

This additional borrowing will elevate the state's total debt burden to Rs 4.64 lakh crore, following a previous loan of Rs 3,000 crore taken on October 1 before Dussehra celebrations.

According to official sources, the new loan will be structured in two phases - Rs 2,700 crore initially, followed by Rs 2,500 crore. The funds are reportedly needed to cover expenses related to Foundation Day celebrations, Ladli Behna Yojana payments, and various welfare and community development initiatives.

With this latest borrowing, Madhya Pradesh's total debt for the first seven months of the current financial year will reach Rs 42,600 crore, establishing a record high in recent years. The timing has generated discussions in both administrative and political circles.

While government officials maintain that these funds are essential for ongoing projects and welfare programs, critics point to the mounting debt and delayed payments as indicators of potential financial management issues.

Financial strain became evident recently during the Bhai Dooj event at the Chief Minister's residence, where thousands of Ladli Behna scheme beneficiaries gathered expecting a festival transfer of Rs 250. However, they left disappointed as the funds were not ready for distribution.

Chief Minister Mohan Yadav assured attendees that the pending amount would be credited in November along with the enhanced monthly installment of Rs 1,500, increased from the previous Rs 1,250. "From November onwards, every sister in Madhya Pradesh will receive Rs 1,500 per month," he stated at the event.

Finance Department sources acknowledge that the Rs 250 festival payment was delayed due to liquidity challenges and pending clearances. The government had initially planned to distribute Rs 1,500 to all 1.26 crore beneficiaries before October 15, but this timeline was repeatedly postponed from Diwali to Bhai Dooj, and now to November.

Since the Ladli Behna Yojana launched in June 2023, the government has transferred over Rs 45,000 crore through 29 installments. The recent Rs 250 monthly increase will add more than Rs 300 crore to the state's monthly expenditure, further straining its financial resources.