Archive · 11 Aug 2026
Madhya Pradesh Uses 30% of Fresh Borrowing on Old Debt
Madhya Pradesh is a big state in India, and it needs to borrow money from lenders, just like grown-ups sometimes use a credit card.
When the state borrows money, it has to pay it back later with a little extra called interest.
A report by India's top money-checker, the CAG, found that for every 100 rupees the state borrows, almost 30 rupees are used just to pay back loans it took earlier.
That is like using a new credit card to pay the old credit card bill.
This means there is less money left to build new roads, schools, and hospitals.
The state's total debt has grown very big, to about 5.31 lakh crore rupees, which is a huge number with many zeros.
If that debt were shared out, every person in the state, even newborn babies, would owe about 55,000 rupees.
The state's finance minister says borrowing is okay because the money is used to build things that will help the economy grow.
But the auditors worry that if the state keeps borrowing to pay old debts, it will have less money for the things people need.
Nearly Rs 30 of every Rs 100 the Madhya Pradesh government borrows goes toward servicing past debt, according to the CAG's 2024-25 audit report.
The state's total outstanding liabilities have reached around Rs 5.31 lakh crore, with internal debt growing from Rs 83,718 crore in 2015-16 to about Rs 3.33 lakh crore by 2024-25.
Gross borrowing for 2026-27 is estimated at about Rs 1.06 lakh crore, alongside a projected Rs 34,437 crore in principal repayment of old debt.
The annual interest bill is projected to rise from Rs 25,888 crore in 2024-25 to about Rs 33,735 crore in 2026-27.
Finance Minister Jagdish Devda maintains borrowing stays within fiscal limits, is used for capital works, and is not funding routine revenue expenditure.
- Who
- The Madhya Pradesh government, Finance Minister Jagdish Devda, and the Comptroller and Auditor General of India (CAG)
- What
- Nearly Rs 30 out of every Rs 100 Rs 100 borrowed by the state is used to service past debt, while total outstanding liabilities have reached about Rs 5.31 lakh crore
- When
- Fiscal years 2024-25 through 2026-27, based on the CAG audit report tabled in the Assembly and the 2026-27 state Budget
- Where
- Madhya Pradesh, India
- Why
- Debt growing faster than the economy has pushed interest and principal repayments to consume a large, predetermined share of state finances
Auditors and debt critics
State government
Purpose of fresh borrowing
Auditors and debt critics
Nearly Rs 30 of every Rs 100 borrowed goes to service old debt, reducing resources available for capital expenditure and new assets.
State government
Loans are raised within prescribed fiscal limits and deployed in capital works; borrowing is not used to finance routine revenue expenditure.
Debt growth
Auditors and debt critics
The state's debt has been growing faster than its economy, and rising interest bills are consuming an ever-larger share of revenue.
State government
Borrowing helps build roads, irrigation and infrastructure that support future economic growth, with the Union government providing 50-year interest-free loans for capital spending.
- Share of borrowing used for old debt (2024-25)
- 29.43%
- 10-year average share of borrowing for old debt
- 29.30%
- Total outstanding liabilities
- Around Rs 5.31 lakh crore
- Per-capita debt burden
- Around Rs 55,323
- Gross borrowing estimate (2026-27)
- About Rs 1.06 lakh crore
- Fiscal deficit (2026-27)
- Around Rs 71,458 crore, about 3.9% of GSDP
- Projected interest payments (2026-27)
- About Rs 33,735 crore
- Revenue absorbed by salaries, pensions and interest
- Nearly 45% of revenue receipts