One of the biggest challenges for the new state government in Madhya Pradesh would be maintaining fiscal prudence, as the current BJP government is already reeling under a loan of more than Rs 3.45 lakh crore and is most likely to take a fresh loan of Rs 1000 crore from the market in the next couple of days.

The results of the State Assembly polls in MP would be announced on 3 December. Whether the BJP retains power or the Congress forms the government, both the parties would face an uphill task in budget management and ensuring financial stability.

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The plethora of monetary incentives being offered to several sections of the public including women, employees, farmers, poor and youth – are a big financial burden on the exchequer and the Shivraj Singh Chouhan-led BJP government has been continuously taking big loans from the market to ensure that the promised payments are made on time to the beneficiaries.

According to well-informed sources, the state government is all set to take another loan of Rs 1000 crore by 28 November to keep its house running. The state finance department is learnt to have made all necessary arrangements to take the loan from the market.

This would be the third time that the Madhya Pradesh government would take a loan from the market since the model code of conduct came into force in the state on 9 October. The government has already taken Rs 3000 crore from the market in loan in two times after the model code of conduct was enforced.

Before that too, the government had taken a loan of Rs 3000 crore on 3 October, said sources.

From January to September 2023, the state government reportedly took a total loan of nearly Rs 37000 crore in 14 times from the market, the Reserve Bank of India (RBI), the National Bank for Agriculture and Rural Development (NABARD) and other financial entities. Just in the month of September, the MP government had taken a loan of Rs 6500 crore from the market.

Sources claimed that the state government currently spends Rs 20000 crore annually just on the payment of interest amount against its loan. They also said that as per budgetary assumptions, the total loan on the state government would rise to around Rs 3.85 lakh crore by 31 March 2024.

The opposition Congress in the state has continuously questioned the BJP government’s loan taking activity. The Congress has also charged that the BJP government’s loan spree has symbolically put a debt of more than Rs 47000 each on the people of MP.

On the contrary, MP Chief Minister Shivraj Sigh Chouhan has always maintained that the state government has taken loan strictly adhering to all the norms laid down by the Reserve Bank of India (RBI).

Nonetheless, it is certain that the new regime in Madhya Pradesh would inherit a financially burdened exchequer, with its expenditures about Rs 55000 crore more than its income of around Rs 2.25 lakh crore.