Opposition calls Sikkim 'bankrupt'; BJP rejects charge as 'political rhetoric'

A political war of words has erupted in Sikkim over the state's financial health after the opposition Citizen Action Party (CAP) described the state as "bankrupt", prompting strong rebuttals from the ruling Sikkim Krantikari Morcha (SKM) government and the Bharatiya Janata Party (BJP), which termed the allegation "misleading" and "political rhetoric".

The controversy began after the passage of the state Budget, when CAP president Ganesh Kumar Rai criticised the government's fiscal policies, alleging excessive dependence on borrowing, inadequate focus on employment generation and income creation, and an unsustainable burden on the state's finances.

Responding to the criticism, Chief Minister Prem Singh Tamang dismissed the allegations, saying those making such claims lacked a proper understanding of economics and were misleading the public.

The political row intensified after Rai reiterated the "bankrupt" allegation during a public talk show on Sunday, August 2, drawing a sharp response from the Sikkim BJP.

BJP spokesperson Passang Sherpa said the opposition was confusing routine government borrowing with actual bankruptcy, stressing that all state governments resort to borrowing as part of fiscal management.

"It is unfortunate that individuals like Ganesh Rai continue to portray Sikkim as a 'bankrupt' state without understanding the fundamental difference between government borrowing and bankruptcy," Sherpa said.

Rejecting the opposition's claim, Sherpa cited financial indicators to argue that Sikkim's fiscal position remains stable. He said the state's debt servicing burden—measured as interest payments as a percentage of revenue receipts—stands at 8.8 per cent, significantly lower than the national average of 12.2 per cent.

He further pointed out that states such as Punjab (22.4 per cent), Kerala (20.9 per cent) and West Bengal (18.3 per cent) have much higher debt servicing burdens than Sikkim.

Calling the repeated "bankrupt" allegation politically motivated, the BJP spokesperson said such statements could undermine investor confidence, damage the state's reputation, create unnecessary public anxiety and adversely impact tourism and future investment.