Gujarat, long projected as a benchmark for economic growth, is now under increasing criticism for its rising public debt. Data tabled in Parliament along with the Reserve Bank of India&rsquo;s State Finances Report highlights that the state&rsquo;s liabilities have climbed from Rs 3.60 lakh crore in 2021-22 to an estimated Rs 4.90 lakh crore in 2024-25 a sharp increase of Rs 1.30 lakh crore within three years.
For Gujarat&rsquo;s six crore citizens, this translates into a per capita debt of over Rs 66,000, effectively meaning that every child born today carries a financial burden from the outset.
<h3 data-start="794" data-end="831">Debt Servicing Growing Costlier</h3>
The outflow towards debt servicing has steadily gone up. In 2022-23, Gujarat spent Rs 23,442 crore on interest payments and Rs 22,159 crore towards principal repayment. According to revised estimates for 2023-24, these figures are expected to touch Rs 25,212 crore in interest and Rs 26,149 crore in principal.
The scale of borrowings has also accelerated. Loans from financial institutions nearly doubled from Rs 3,463 crore in 2022-23 to Rs 7,000 crore in 2023-24. Similarly, market loans rose from Rs 43,000 crore to Rs 51,000 crore, while central debt obligations increased from Rs 5,870 crore to Rs 7,634 crore, underscoring the state&rsquo;s rising reliance on external borrowings.
<h3 data-start="1520" data-end="1576">Opposition Targets BJP Over &ldquo;Extravagant Spending&rdquo;</h3>
Opposition parties argue that the mounting debt is not solely linked to developmental works but also to lavish government spending.
Congress MLA Amit Chavda remarked: &ldquo;Day by day, the government&rsquo;s debt is mounting, and so is the burden on Gujaratis. Instead of responsible governance, the ruling BJP seems to be living by the policy of &lsquo;drinking ghee on borrowed money&rsquo;. The government spends lavishly on summits and publicity drives, but ignores pressing concerns such as farmers&rsquo; distress, education, and healthcare. This debt is not for the people; it is for pageantry and the interests of a select few.&rdquo;
Echoing a similar view, AAP state president Isudan Gadhvi stated: &ldquo;Under BJP&rsquo;s rule, education, healthcare, and electricity are not free, women are denied dignity grants, and yet Gujarat&rsquo;s debt has touched Rs 4.90 lakh crore. This is the outcome of corruption and policies designed to benefit industrialists, not ordinary citizens.&rdquo;
Economists have also sounded alarms over the pace of borrowing. Professor Raghav Desai told Benefit News: &ldquo;The trajectory of Gujarat&rsquo;s debt is worrying. Debt can be beneficial if it funds productive infrastructure that generates long-term returns. However, the current pattern suggests a disproportionate share is being spent on non-essential expenditure, which risks mortgaging future revenues simply to pay interest.&rdquo;
<h3 data-start="2956" data-end="3002">Government Defends Its Fiscal Management</h3>
State officials, however, maintain that Gujarat&rsquo;s financial health is stable and well-managed.
Finance Department Secretary Arti Kanwar, in a statement to Benefit News Network, explained: &ldquo;We need to see the data holistically. Gujarat is in a stronger position compared to several other states. The state&rsquo;s public debt stands at Rs 3.99 lakh crore at present, with total liabilities projected at Rs 4.90 lakh crore in 2024-25, up from Rs 3.60 lakh crore in 2021-22. The debt-to-GSDP ratio is estimated at 18.8% in 2024-25, below the all-state average of 27.6%. The fiscal deficit is budgeted at Rs 63,150 crore, or 2.4% of GSDP, which is within prudent limits. Guarantees to state PSUs are slightly down, and Gujarat continues to raise most of its financing through market borrowings.&rdquo;
A senior finance department officer, requesting anonymity, added: &ldquo;The increase in borrowing is part of a calibrated fiscal strategy. Gujarat has ambitious development goals and investment-heavy schemes. The debt-to-GDP ratio remains manageable, and repayment schedules are being met on time.&rdquo;
Despite such assurances, opposition leaders argue that Gujarat&rsquo;s debt has now outstripped the state&rsquo;s annual budget and could turn unsustainable. While the government highlights growth statistics and fiscal discipline, critics warn that ordinary Gujaratis are the ones left bearing the real weight of this financial trajectory.

Liabilities Climb, Gujarat’s Debt Burden Grows

Borrowings surge as opposition warns Gujarat’s future revenues risk being mortgaged

Liabilities Climb, Gujarat’s Debt Burden Grows

Borrowings surge as opposition warns Gujarat’s future revenues risk being mortgaged

August 19, 2025 | 23:40 IST