Public debt of Gujarat has risen from Rs 10,000 crore to Rs 3.2 lakh crore during BJP rule

When Narendra Modi became chief minister in 2001-02, the state's public debt had mounted to Rs 45,301 crore. By the time he left for New Delhi as PM, the debt had grown to Rs 2.21 lakh crore

An activist protests against a wall built in front of a slum in Ahmedabad before US President Donald Trump's visit in February 2020 (Photo: Getty Images)
An activist protests against a wall built in front of a slum in Ahmedabad before US President Donald Trump's visit in February 2020 (Photo: Getty Images)
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R K Misra

There is a Sanskrit proverb that goes: Rinam kritva ghritam pibet, yavan jivet sukham jivet. It means: live as long as you have a good life and live comfortably (eat ‘ghritam’ or ghee, being a marker of said good life) even if you have to take a loan. The proverb fits the philosophy of the mercantile class—and the state of Gujarat—to a T.

When the BJP first came to power in Gujarat in 1995, the state’s public debt was around Rs 10,000 crore. By the time Narendra Modi became chief minister in 2001-02, the debt had mounted to Rs 45,301 crore. In 2014, when Modi left the state for New Delhi, the CAG put the total debt of the state at Rs 2.21 lakh crore. The cumulative debt ballooned to an all-time high of Rs 3.2 lakh crore in 2021-22, higher than the annual budget of Rs 2.4 lakh crore for the 2022-23.

What is more, the state’s public debt is projected to go up to Rs 4.5 lakh crore by the end of 2024-25.

While these figures were shared by the state’s finance minister Kanu Desai in March this year while presenting the budget, he made no reference to the debt trap the state is heading towards; that is because it has to pay back 61 per cent of the debt of over Rs 3 lakh crore over the next seven years. The CAG (Comptroller and Auditor General) estimates, in a report tabled in the assembly, that the state will have to repay as much as Rs 1.87 lakh crore by 2028.

The same report also points out that while the state’s Gross State Domestic Product (GSDP) has grown at a compounded annual growth rate (CAGR) of 9.2 per cent between 2016 and 2021, public debt has grown at a CAGR of 11.5 per cent.

The accumulated losses of state public sector undertakings have grown to Rs 30,400 crore and the CAG has taken note of the fact that the Gujarat government continues to invest in entities like the Gujarat State Petroleum Corporation and Road Transport Corporation, whose net worth is completely eroded; Rs 1,000 crore was invested in GSPC and Rs 469 crore in GSRTC even though both have negative net worth. Gujarat has 97 state PSUs, 64 government companies, 29 government-controlled companies and four statutory corporations.

The bi-annual Gujarat Global Investors’ Summit helped project Narendra Modi’s image as ‘Vikas Purush’ or a development champion and catapulted him to national politics.

From the first Gujarat Global Investors’ Summit in 2003 up to the seventh one in 2015, the state government claimed to have bagged investment commitments worth a mind-boggling Rs 84 lakh crore with the 2011 summit alone accounting for Rs 20.8 lakh crore. In the run-up to the eighth summit in 2017, the then Chief Secretary J.N. Singh claimed that 66 per cent of the commitments made till then had materialised.

That preposterous figure went unquestioned; for perspective, the GDP of India in 2017-18 was Rs 131.8 lakh crore. When eyebrows were raised finally, the state government stopped making exaggerated claims. It stopped quantifying investment commitments in rupee terms and has now dropped the word ‘investor’ from the summit.


Amusingly, the state Directorate of Economics and Statistics admits that only about 8 per cent of the commitments made between 2003 and 2011 have been implemented. Financial observers and experts have also pointed out that while Maharashtra had bagged 30 per cent of India’s total investment between 2000-to 2016, Gujarat actually ranked fifth with marginally more than 10 per cent of the investment made in Maharashtra. A study by the Department of Industrial Policy and Promotion (DIPP) put Gujarat’s share in actual Foreign Direct Investment (FDI) inflows to India between 2000 and 2013 at only 4 per cent. In absolute terms, Gujarat received FDI worth Rs 39,000 crore out of the total FDI of Rs 9.1 lakh crore received nationally during this period. Gujarat’s share had actually been declining from 3.4 per cent in 2011 to 2.9 per cent in 2012 to 2.4 per cent in 2013.

BJP has had an uninterrupted 27-year run in power in the state. For 13 of those years Narendra Modi was the chief minister. The state slipped from fourth to eleventh position in per capita health expenditure between 2000 and 2010 and the total state expenditure on health over the same period declined from 4.39 per cent to 0.77 per cent.

Citing Union health ministry data, media reports in 2020 pointed out that Gujarat had 0.33 hospital beds per thousand population compared to the national average of 0.55. 'The total number of primary health centres in Gujarat is less than Bihar, with rural public hospitals being only a third of that in Bihar. On top of it, large number of government hospitals have been privatised…the absence of a robust public health infrastructure is accompanied by a decline in investment for education. Gujarat spends less than 2 per cent of its income on education…consequentially, nearly 45 per cent of the state work force are illiterate or have studied only up to the fifth standard,’ a media report said.

This is borne out by the educational background of the ministers in the state. In a 2017 report, the Association for Democratic Reforms pointed out that nine Gujarat ministers had declared to have studied till Class 5 to 12 while nine were graduates or had higher degrees.

In 2021, after all the ministers were changed, media reports held that six ministers in Bhupendra Patel’s cabinet had cleared higher secondary while six others had passed their grade 10 examinations.

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