Hyderabad: Telangana’s open market borrowing limit has been reduced by Rs 19,000 crore for the current fiscal year by the Union finance ministry.
This implies that instead of the Rs 53,970 crore fiscal responsibility and budget management (FRBM) loan that was envisaged in the Budget, the state would now only be able to raise Rs 34,970 crore in 2022–23.
The state budget would fall short by at least Rs 50,000 crore since it is unlikely that it will get the projected grant-in-aids contributions of roughly Rs 41,000 crore. The state administration was unable to raise loans in the first two months of this fiscal year due to new requirements the Finance Ministry imposed for raising FRBM loans.
In June, the Centre gave the state permission to raise the loans on an as-needed basis. The state was recently informed by the Finance Ministry that the FRBM loan will be reduced by Rs 19,000 crore for 2022–2023. Only Rs 34,970 crore may be raised by the state in the current fiscal year using this method.
The state administration has chosen to increase its resources in order to maintain the welfare program and developmental initiatives now that there is some certainty over the number of loans.
The budget year 2022–23 is about Rs. 2.56 lakh crore. The State may get a grant-in-aid of about Rs 10,000 crore, while the anticipated gap may total about Rs 31,000 crore. The FRBM loan deficiency is Rs 19,000 crore. By doing this, the Budget’s size might be lowered by Rs 50,000 crore. Finance Minister T Harish Rao told Express on Tuesday that “we are looking into different methods to produce more financial resources.”
He gave the assurance that the administration would fulfill its promise to include new beneficiaries above the age of 57 in the Aasara pensions ambit. He stated that Chief Minister K Chandrasekhar Rao would reveal the launch date.
Telangana received Rs 10,000 crore through open market borrowings after the Finance Ministry permitted the State to raise FRBM loans by Rs 7,000 crore in June and another Rs 3,000 crore on Tuesday.
The refusal of loans was attributed to “politics,” even though the State’s debts are within acceptable bounds and it ranks higher than numerous other States in terms of fiscal metrics. A source in the State Finance department said, “It all hinges on the Center-State ties.”
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