MP govt raises another ₹3,600 crore loan:Total debt climbs to ₹5.61 lakh crore, to be repaid over 18 and 30 years with interest

The Madhya Pradesh government, led by Chief Minister Dr Mohan Yadav, on Tuesday raised ₹3,600 crore through fresh market borrowings. The amount has been raised in two separate tranches, with repayment periods of 18 years and 30 years. With this latest borrowing, the state’s total market borrowing in the 2026–27 financial year has increased to ₹17,400 crore, while its overall outstanding liabilities have risen to approximately ₹5.6114 lakh crore. Funds raised through bonds and government securities According to a notification issued by the Finance Department, the funds will be raised by issuing state development bonds and auctioning government securities. The government said the borrowed funds will be used to finance productive development programmes and various public infrastructure projects across the state. It added that the required approval from the Central Government had been obtained before raising the loan. ₹1,600 crore borrowed for 18 years, ₹2,000 crore for 30 years As per the notification, the first tranche consists of ₹1,600 crore, raised with a maturity period of 18 years. The second tranche of ₹2,000 crore has a maturity period extending up to 2056, effectively making it a 30-year loan. The state government will pay 7.90% annual interest on both borrowings. Interest payments will be made every year on April 15 and October 15, while the loan amount will be settled on Wednesday. Auction conducted through RBI’s e-Kuber platform The gazette notification stated that the auction of government securities was conducted through the Reserve Bank of India’s e-Kuber platform, with eligible institutional investors participating in the bidding process. A provision was also made for non-competitive investors to participate in the auction up to the prescribed limit. State debt stood at ₹4.88 lakh crore as of March 31 According to the government, Madhya Pradesh’s total outstanding debt stood at ₹4,88,714.17 crore as of March 31, 2026. The largest component of this debt was market loans amounting to ₹3,33,278.21 crore. The remaining liabilities include borrowings from financial institutions, the Central Government, the National Small Savings Fund (NSSF) and other sources. Loan to fund infrastructure and development projects The state government said the newly raised funds will be used for development projects in sectors including irrigation, agriculture, energy, roads, communication, drinking water supply, cooperative institutions and other infrastructure projects. The government also maintained that the value of the state’s assets exceeds its total liabilities, indicating that Madhya Pradesh’s overall financial position remains balanced.