Madhya Pradesh To Borrow Rs 5,200 Crore, Month After Rs 3,000-Crore Loan

Days before Madhya Pradesh celebrates its Foundation Day on November 1, the state government, led by Chief Minister Dr Mohan Yadav, is preparing to take yet another loan, this time to the tune of Rs 5,200 crore. This fresh borrowing marks the 20th loan taken by the government since coming to power and will push the state's total debt burden to Rs 4.64 lakh crore.

The last loan of Rs 3,000 crore was taken on October 1, just before Dussehra. 

Official sources said the new loan will be taken in two instalments - Rs 2,700 crore in the first phase and Rs 2,500 crore in the second. The funds, officials say, are being raised to meet payments related to Madhya Pradesh's Foundation Day celebrations, Ladli Behna Yojana instalments, and other welfare and community development schemes. 

With this borrowing - at a time when the state's finances appear stretched, and welfare commitments are piling up - the total debt taken by Madhya Pradesh in the seven months of this financial year alone will touch Rs 42,600 crore, which will be a record high in recent years. 
The timing of the loan has sparked murmurs in administrative and political circles. While officials insist the money will be used for ongoing projects and welfare schemes, critics argue that mounting debt and delayed payments are exposing the state's financial management. 

The strain was visible just days ago during the Bhai Dooj event at the Chief Minister's residence, when thousands of Ladli Behna beneficiaries of the government's flagship women's welfare scheme gathered, expecting a symbolic festival transfer of Rs 250. The women returned disappointed, as the funds were not cleared. Chief Minister Mohan Yadav assured them that the pending amount would be credited next month, along with the newly increased monthly instalment of Rs 1,500, up from Rs 1,250.

"From November onwards, every sister in Madhya Pradesh will receive Rs 1,500 per month," the chief minister said at the event. 

Sources in the Finance Department admit that the Rs 250 festival instalment was delayed due to liquidity pressure and pending clearances. The government had initially planned to release a lump sum of Rs 1,500 to all 1.26 crore beneficiaries before October 15, but the decision was deferred first to Diwali, then to Bhai Dooj, and now to November.

Since the launch of the Ladli Behna Yojana in June 2023, the government has transferred over Rs 45,000 crore through 29 instalments. The new hike of Rs 250 per month will add over Rs 300 crore to the state's monthly expenditure, further tightening its fiscal belt.