New Delhi: The State Bank of India (SBI) has warned in a report that the announcement of free gifts by political parties could pose a serious threat to the economy in the future. It was said in the report that this can prove fatal for the economy. The report suggests that the committee appointed by the country’s Supreme Court limit such spending to one percent of the state’s gross domestic product (GDP) or state tax collection.
In this report by SBI Chief Economic Advisor (Cluster), Soumya Kanti Ghosh, the example of three states was given amid an ongoing debate over political party giveaways. He said the annual pension liability in Chhattisgarh, Jharkhand and Rajasthan, which fall under the category of poor states, is estimated at Rs 3 lakh crore. According to the report, the pension obligation as a percentage of tax revenue in these states is very high. In the case of Jharkhand, it is 217%, in Rajasthan 190% and in Chhattisgarh 207%. Of the states planning to reinstate the old pension system, the pension obligation to tax revenue in Himachal Pradesh will be 450%, in the case of Gujarat 138% and in Punjab 242% .
Beneficiaries do not contribute to the old pension system. Ghosh said that according to the latest available information, off-budget state debt reached around 4.5% in 2022. This includes debt that public sector units raise that is guaranteed by state governments. In various states, these guarantees have reached a significant percentage of GDP.
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