Telangana looks to banks for 5,000 cr debt
Hyderabad: With a steep hike in the outlay for the social sector in the state budget for 2018-19, the Telangana government is relying on open market borrowings to implement Chief Minister K Chandrasekhar Rao’s ambitious ‘crop investment support scheme,’ besides other. The government is planning to borrow Rs 5,000 crore required for the crop scheme to be launched in April before the beginning of the kharif season this year.
The government has earmarked Rs 12,000 crore for the investment support scheme under which Rs 8,000 will be given per acre per crop for two crops to every farmer in kharif and rabi seasons. As a first installment, nearly 70 lakh farmers will be given Rs 4,000 per acre in the ensuing agricultural season.
Officials said the Finance department is making arrangements to go in for open market borrowings and seek loans from the banks. Under the FRBM (Fiscal Responsibility and Budget Management) Act, the state can avail nearly Rs 25,000 crore market borrowings every year.
Perhaps, it will be the first huge borrowing in the first month of the new financial year, which begins on April 1. The loans to be taken from the open market will be repaid in 20 years. As per the agreement entered with the financial institutions, the government will pay interest every year and repay the principal amount in the last year.
The Finance department officials said the government has been using the borrowings for infrastructure development programmes like construction of irrigation projects and meet the financial requirements in the emergency time. Now, nearly 50 per cent of the market borrowings (Rs 25,000 crore) will be diverted to the investment support scheme.
As a result, the government will find alternatives to meet the expenditure to be incurred for other developmental programmes. The government has already decided to constitute another irrigation corporation on the lines of the Kaleshwaram Corporation to get funds from the scheduled banks in the new financial year.