Leader of the Opposition Ramesh Chennithala sparred with Finance Minister T.M. Thomas Isaac over the increasing debt-to-GDP ratio of the State during question hour in the Assembly on Thursday.
While Mr. Chennithala said the debt-to-GDP ration had gone up by 10%, Dr. Isaac claimed that the debt-to-GDP ratio could not have gone up more than 1-2% and that it had gone up slightly only because the State’s GDP growth rate went down below the national average.
Dr. Isaac said that he had no intention of reducing the State’s debt obligation because the idea was to speed up the growth so that the State grew out of debt. Even when the debt liability was high, the key was to ensure its sustainability, he claimed.
Capital investment
The ideal situation would be to divert at least two-thirds of the borrowing towards capital investment.
Congress legislator V.D. Satheesan questioned the efficiency or the quality of the State’s expenditure when the total expenditure of the government’s first 1,000 days in office was ₹9 crore, of which Panchayat Day celebrations cost ₹4 crore.
The Minister defended this by saying that the celebrations involved large-scale mobilising of the community.