Despite having 40 per cent of the country’s mineral and forest reserves, arable land and historical and cultural diversity, the finances of Jharkhand are in a shambles.
In 2000, Jharkhand was carved out of Bihar. At that time, it was expected that Jharkhand’s economy will witness rapid growth compared to Uttar Pradesh and Chhattisgarh as the state has all the factors which are needed for rapid growth and development.
Ironically, Jharkhand is one among the five most backward states of the country where the per capita income is the lowest.
The per capita income in Chhattisgarh is 20 per cent higher and 110 per cent more in Uttarakhand as compared to Jharkhand.
The year-on-year mounting debt on Jharkhand also testifies that state’s finances are in a sorry state of affairs.
Right now, Jharkhand is having a debt of more than Rs one lakh crore which means that every person in the state is under a debt of more than Rs 26,000. The fiscal deficit is compelling the government to go for more borrowing.
However, Jharkhand Finance Minister Rameshwar Oraon blames the Union government for the economic burden on the state.
Oraon is of the view that if the Centre provides compensation for harnessing Jharkhand’s resources, the state will become financially stable.
Some 53,000 acres of land in Jharkhand was given to the Coal Ministry but compensation has not been granted. Over Rs 65,000 crore compensation is due from the Union government, he claimed.
On February 25, the government issued the state’s statistical profile report, which clearly indicates the state’s poor finances.
As per this report, in 2020-21, the state’s provisional GDP was minus 1.27 per cent, while in 2019-20, it was 5.6 per cent and in 2018-19, 13.30 per cent.
If we look at the state budget, the budget size increased year after year but sources of revenue were not developed in that respect.
The state’s maiden budget for 2001-02 was Rs 4,800.12 crore only. At that time, the state government had more than Rs 70 crore cash surplus.
For the financial year 2020-21, the state presented a Rs 73,854 crore budget while for 2021-22, the budget size increased to Rs 91,277 crore.
During the review of the Department of Planning and Development, it came to the fore that only 40.43 per cent of the sanctioned amount could be utilised till date.
Figures show that in the past five financial years, Jharkhand’s share of tax submitted to the Centre has reduced by eight per cent.
In the state’s 2016-17 budget, for Central taxes, its share was 32 per cent, in 2019-20, it reduced to 29 per cent and in 2021-22, it came down to 24 per cent. To bridge the fiscal deficit, the government has been taking loans.
In the past two decades, the government in 2015-16 took the biggest loan of Rs 5,333.4 crore through power bonds.
Economist and former vice chancellor of Vinoda Bhave University, Dr Ramesh Sharan told IANS that lack of financial management and skill are the main reasons for the state’s ailing economy.
Developing infrastructure by taking loans and giving impetus to the development is not a bad idea but the state has not fully utilised the amount it has taken.
The money was spent on schemes which were not able to pay dividends. Money was spent on dead assets.
According to Sharan, by developing mineral based industries, establishing and developing MSME units, forest produce based processing units and a concrete plan for the tourism sector, Jharkhand can emerge as a strong economy.