According to the latest report on State Finances: A Study of Budgets 2003-04 released by the RBI, Uttar Pradesh is the most indebted state followed by Andhra Pradesh, Rajasthan and West Bengal.
Tamil Nadu stands at number five followed by Laloo Prasad Yadavs Bihar and Narendra Modis Gujarat.
Uttar Pradesh has to pay up Rs 5,601 crore within the next five years, while the state has to raise another Rs 13,547 crore during the five to ten year period.
Andhra Pradeshs former CEO Chandra Babu Naidu can really thank the voters for not returning him to power as the state has to cough up a total of Rs 14,257 crore during the coming ten year period. Since the state has leveraged its resources to the hilt, the new government will have a tough time in meeting the repayment obligation.
Rajasthan chief minister Vasundhara Raje can start worrying about raising resources to the tune of over Rs 2,000 crore in the coming five years as the state has to shell out Rs 2,145 crore to pay off its debt in the coming five years. The state has to pay close to Rs 10,000 crore in the coming ten years to repay its debt.
Tamil Nadu has to rake in Rs 9,000 crore in the coming 10 years to pay off its debt while Bihar has to retire debt worth Rs 8,526 crore during the next 10 year period.
One interesting trend is that the short term debt maturing before five years is relatively small while debt with a maturity of above five years is sizable.
While debt with a maturity of below five years is only Rs 33,651 crore, debt that matures between five years and ten years amounts to Rs 99,417 crore.
This could be because the ruling parties in different states are not sure about their coming back to power and are spending tomorrows money today to meet current expenditure.
More importantly, the huge debt burden of the state governments may well trigger a crisis if any one them failed to honour their payment obligations.