Centre's borrowing rider choking TS

Hyderabad: The objections raised by the Union Government on loans to be taken from corporations and fixing the borrowing eligibility of the state is likely to lead to a shortfall of Rs 19,000 crore of the Rs 54,000 crore which the government wanted to raise through borrowings during the current financial year 2022-23.

Top sources in the Government said that the Centre had questioned the state for seeking huge loans through corporations which did not mention the same in the state debt account in the previous year. "The state's public debt outstanding in the GSDP was not more than 25 per cent. If the loans taken by the corporations are included, the total debt size will be more than the limit of 25 per cent. The Union Finance ministry has sought explanation for not including the corporation loans in state debt and analysed the state's total borrowings from the RBI as well as other financial institutions from corporations.

Officials said that the Centre has asked the state to include the corporation loans in the state debt and reduced the borrowing limit to Rs 35,000 crore this year. The state government had already requested the RBI to sanction Rs 15,000 crore as borrowing through the sale of security bonds.

"The Centre should not insist that the states include the borrowings taken by corporations in the state debt account. It was not new for the corporations to mobilise funds through loans for infrastructure development projects. But the Union government is deliberately pushing the state into a financial crisis by depriving their right to seek borrowings within the FRMB limit," said State Finance authorities.

Sources said the restrictions imposed by the Union Finance Ministry on the state borrowings will lead to financial crunch causing problems to meet the required funds to implement welfare and developmental programmes. The 2022- 2023 financial year is a crucial year for Telangana Government as the Assembly elections are just 18 months away. The government will have to fulfil the promise of reducing the age limit to 57 years for Aasara pensions from this year. Due to the fund crisis, the scheme is yet to take off. "Though the state is reeling under financial crisis, the government is making every effort to implement the scheme from July or August as more than 20 lakh applications are pending approval under the pension," said a senior official said.