Cash-strapped Telangana government uses funds judiciously

Hyderabad: The state government, which is grappling with financial crisis, has stopped the release of funds to the non-focal wings in June to fulfil the commitments like the release of pending pensions to the beneficiaries, Rythu Bandhu, Kalyana Lakshmi and other schemes. "The government is yet to take a decision on releasing money to the farmers under Rythu Bandhu for the ensuing kharif season. Increased financial commitments and the delay in borrowing money from the financial institutions mainly RBI has put heavy burden on the state during June," said a senior official of the Finance department.

The only option before the government was to manage with the available resources, he said. The government was not sure whether the Centre would permit Telangana to go in for borrowings during July.

The RBI had not permitted the state to borrow during the last two months on the pretext that the state government had crossed the FRMB limit. If the RBI raised objections on borrowings in July, the state would face a deeper crisis in July.As a pre-emptive measure, the government is stopping the release of funds mainly to clear the bills of the contractors who had taken up roads development, panchayat and municipal development works and the construction of various state-owned institutions in the districts.

"The government will release funds to the priority sectors like Education, Medical and Health and for the implementation of important welfare schemes," an official said. "It requires Rs 10,000 crore to meet Rythu Bandhu, pensions and other welfare schemes in June. The finance wing is scouting for Rs 4,000 crore in addition to Rs 4,000 crore already mobilised through borrowings," he said.

Officials said that the only option before the government to overcome the financial burden was to stop releasing funds liberally and utilize the available finances in a disciplined manner.