Rs 125 Crore A Day: Madhya Pradesh's Debt Belies 'Performer State' Title

The latest Rs 4,100 crore loan comes at the heels of Rs 5,800 crore raised on March 10 and Rs 6,300 crore on March 3.

20 Mar 2026, 07:54 · www.ndtv.com

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Madhya Pradesh raised Rs 16,200 crore in March, marking its third recent borrowing round
Total borrowing for the year may reach Rs 89,000 crore, pushing debt beyond Rs 5.08 lakh crore
State maintains revenue surplus with 58.5% total revenue growth since 2019-20

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Even as NITI Aayog has labelled Madhya Pradesh a "Performer State" in its Fiscal Health Index 2026, the state's aggressive borrowing tells a conflicting story. In March alone, the state government has raised a staggering Rs 16,200 crore marking its third borrowing round within weeks and triggering serious questions over fiscal management.

The latest Rs 4,100 crore loan comes at the heels of Rs 5,800 crore raised on March 10 and Rs 6,300 crore on March 3 (Holi). For the full financial year, total borrowing is set to touch Rs 89,000 crore, pushing the state's outstanding debt beyond Rs 5.08 lakh crore.

What makes the situation striking is the contrast with the state's reported fiscal performance. According to the index, Madhya Pradesh has maintained a revenue surplus since 2021-22, with strong growth in GST, excise and trade tax collections. Between 2019-20 and 2023-24, total revenue rose by 58.5 per cent, while tax revenue surged by over 62 per cent. Despite these gains, the state ranks only 10th among 18 states, raising questions about the depth of its fiscal strength.

The pressure points are equally stark. More than 43 per cent of the state's revenue is locked into committed expenditure such as pensions and interest payments, leaving limited room for flexible spending.

Welfare commitments are also rising sharply. Schemes like Ladli Behna alone cost Rs 1,890 crore every month, or Rs 22,680 crore annually, with plans to increase payouts further by 2028.

On February 17, the state had already raised Rs 5,600 crore through four loans with tenures ranging from eight to 23 years. Over the past two years, Madhya Pradesh has been borrowing at an average pace exceeding Rs 125 crore every single day, signalling a deepening dependence on debt.

The government maintains that this is a calculated push for growth. Deputy Chief Minister Jagdish Devda has defended the borrowing, stating that funds are being channelled into capital expenditure. Infrastructure spending is projected to cross Rs 1 lakh crore in 2026-27, with a strong focus on roads, irrigation, hospitals, schools, and industrial expansion.

The Centre's provision of 50-year interest free loans has further encouraged states to step up borrowing. The state argues that a strong revenue base combined with rising capital investment will fuel long-term economic momentum and improve the investment climate.

Former chief minister and senior Congress leader Kamal Nath has launched a sharp attack. "Madhya Pradesh has become a state of fiscal indiscipline. While the government is borrowing thousands of crores every month, it has failed to spend its own budget efficiently. Only 67 per cent of the budget has been utilised so far, leaving nearly Rs 1.1 lakh crore unspent," he said.

He further alleged that the rising debt is fuelling "event management and wasteful expenditure," accusing the government of ignoring public welfare while burdening the state with loans.

The state's total debt has jumped from Rs 4.21 lakh crore in March 2025 to over Rs 5 lakh crore within a year.

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