MP Government to Borrow Another ₹2,800 Crore; Total Debt Burden Reaches ₹5.02 Lakh Crore

Bhopal: The Mohan Yadav government of Madhya Pradesh is preparing to borrow ₹2,800 crore from the market once again. To this end, the Finance Department issued a notification on Tuesday to float bonds in two tranches under the State Development Loan scheme. The funds will be raised in amounts of ₹1,600 crore and ₹1,200 crore. With this new borrowing, the total debt incurred by the state government in the current financial year will reach ₹13,800 crore. Consequently, the state’s total outstanding debt will rise to ₹5.02 lakh crore.

Government to Issue Two Types of Bonds
According to the Finance Department, the state government will raise ₹1,600 crore through the re-issuance of State SGS-2034 bonds carrying an interest rate of 7.64%. This loan will have a tenure of 8 years, with interest payable annually on April 29 and October 29. Additionally, ₹1,200 crore will be raised through State SGS-2048 bonds with an interest rate of 7.83%; the tenure for this loan has been set at 22 years. Both bonds will be auctioned by the Reserve Bank of India via the e-Kuber system.

Funds to be Spent on Development Works
According to the state government, the proceeds from these bonds will be utilized for development activities and infrastructure projects across the state. Necessary approval for this has already been obtained from the Central Government. It is reported that the funds may be spent on road construction, irrigation projects, power infrastructure, water resource development, communication facilities, and other public projects.

MP’s Debt Stood at ₹4.88 Lakh Crore by March 2026; Current Status
According to financial documents, the total debt on Madhya Pradesh stood at over ₹4.88 lakh crore as of March 31, 2026. The government claims that the loan amount has been utilized for irrigation, energy, cooperative institutions, and other capital development projects. With this new loan of ₹2,800 crore, the state’s total debt figure will rise to ₹5.02 lakh crore.