HYDERABAD: With the state government proposing to raise Rs 73,383.60 crore open market loans in 2026–27, the total public debt outstanding (FRBM loans) will touch Rs 5,62,363 crore by the end of 2026–27, which is 29 per cent of the Gross State Domestic Product (GSDP). With this, the per capita debt will be around Rs 1,60,675.
Besides, as on February 2026, the outstanding guarantees given by the state government are Rs 3,01,835 crore, taking the total debts, both FRBM and guarantees, to Rs 8.63 lakh crore.
With the increasing debt burden, the state government has decided that guarantees will be provided only to those public sector undertakings (PSUs) that have adequate internal cash flows to serve their debt.
According to the Fiscal Policy Strategy statement tabled in the State Legislative Assembly on Friday, the state government, during the financial year 2025-26, replaced high-interest off budget borrowings amounting to Rs 25,612 crore with open market borrowings that carry lower interest rates and longer tenures.
Market borrowings are planned to be raised with different tenures with a view to ensure that the redemption burden is equally spread across the years. Most of the borrowings of the government are being utilised for capital expenditure. This will result in income generating assets and more income to people, the Fiscal Policy statement said.
In order to augment its resources, the government is considering a number of proposals to shore up the revenues in the state during 2026–27 and thus make adequate resources available for development and welfare programmes, it added.