Madhya Pradesh's total debt has risen to Rs 4.65 lakh crore, exceeding the state's total budget of Rs 4.21 lakh crore for the financial year 2025-26.
Amid an ongoing debate over the state's financial condition and mounting debt, Urban Development and Housing Minister Kailash Vijayvargiya has acknowledged that the fiscal health of states has significantly deteriorated, largely due to election-related and political commitments that have placed a direct burden on government treasuries.
Speaking at a regional conference of Urban Development Ministers from northern and central states, organised by the Union Ministry of Housing and Urban Affairs at the Kushabhau Thakre Convention Centre, Vijayvargiya said that these pressures have forced state governments to increasingly look towards the Centre for financial support. While efforts are being made to move towards self-reliance, he admitted that promises made during elections have multiplied financial stress on state governments.
Vijayvargiya said the time has come for cities to take responsibility for the development of surrounding areas by placing themselves in the driving seat. Citing Madhya Pradesh as an example, he said greater central assistance is required for schemes such as the AMRUT Mission and the Pradhan Mantri Awas Yojana, as states are now operating within clear financial limitations.
Union Housing and Urban Affairs Minister Manohar Lal Khattar, who also attended the meeting, expressed concern over the financial position of states. He said reducing income disparities is essential to making the country self-reliant and that this can only be achieved through coordinated efforts between the Centre and the states. According to him, states must strengthen their own capacities to sustain the pace of development.
The discussion on fiscal pressure has gained momentum at a time when questions are being raised over Madhya Pradesh's growing debt following the completion of two years of the state government's tenure. Over the past nearly two years, the state government has taken loans averaging more than Rs 125 crore per day.
A significant portion of expenditure is being driven by welfare schemes, with the Ladli Behna Yojana alone costing the state exchequer Rs 1,890 crore every month, amounting to Rs 22,680 crore annually. The government has promised to increase the monthly assistance under the scheme to Rs 3,000 by 2028, while the Chief Minister has also expressed an intention to raise it further to Rs 5,000 per month in the future.
Two days earlier, responding to questions on the rising debt burden, Deputy Chief Minister and Finance Minister Jagdish Devda defended the government's position, stating that the borrowing should be viewed as investment rather than debt.
He said loans are taken strictly within the limits set by the Government of India and that the entire amount is being spent on infrastructure development. According to him, while the opposition refers to it as debt, the government considers it an investment for long-term growth.
Chief Minister Mohan Yadav, speaking during a special session of the Madhya Pradesh Assembly, said that since the formation of his government, the state has been growing at a rate of around 14 to 15 per cent over the past two years.
Addressing concerns over debt, he added that a substantial portion of the state's total liabilities had been accumulated during previous governments, while the current administration is using resources to accelerate development.
