State governments owe outstanding loans amounting to more RM750 million as of last year, the Dewan Rakyat heard today.

Kedah's debts is the highest at RM265 million, followed by Johor (RM141 million) and Selangor, (RM74 million).

The two states held by opposition party PAS Terengganu and Kelantan owe RM67 million and RM62 million respectively.

Penang and Sarawak are the only two states which did not have any outstanding debts.

Elaborating on the breakdown of the state debts in the question-and-answer session, Finance Ministry parliamentary secretary Hashim Ismail said Kedah owed the highest amount because of the swift development in the state.

"Since the grants from the federal government allocated to Kedah was higher for their development projects, it is reasonable that the state has more outstanding loan," he asserted.

Grants

Ramli Ibrahim (Keadilan-Kota Bahru) had also requested the ministry to reveal the estimated grants to all state governments for 2003 and 2004.

Responding to this, Hashim said the government has estimated a total of RM1.96 million and RM2.19 million in grants by the federal government in 2003 and 2004 years respectively.

The grant allocation takes into account the population size and any increase in number of residents.

In a supplementary question, Ramli grilled the ministry for the late delivery of allocation to the two opposition-led states.

Replying to this, Hashim cautioned about raising this into an issue.

"It is only a delay of about three to four months. This period [delay] could be fully used by the two state governments to plan for their budget for the allocation," he said.