Lucknow: Uttar Pradesh Chief Minister Mulayam Singh Yadav today (Nov 14) admitted the State was caught in a debt trap and the Government was looking at all options to bring the economy back on rails.

"The financial situation in the State is not good ...We are caught in a debt trap where we are borrowing money to carry out expenditure and this should come to an end at the earliest," Yadav told reporters after presenting a Rs 1,020 crore tax-free deficit Budget in the Vidhan Sabha.

"We have practically no money left for development as 88 per cent of our revenue collection goes in payment of interest, salaries and pension to Government employees," he said.

Yadav, who also holds the Finance portfolio, said the Government was looking at many options to take the bleeding State corporations out of the red.

"Government would stop unnecessary expenditure and steps would be taken to generate additional revenue," the Chief Minister said.

Keeping this in mind the State will bring in a legislation, "Uttar Pradesh Finance Accountability and Budget Management" in the on-going Budget session, he added.

PTI