VIJAYAWADA: Asserting that borrowings, as well as guarantees given to the Public Sector Undertakings (PSUs), are within the limits of the Fiscal Responsibility and Budget Management (FRBM) Act, Special Secretary to CM (Finance and Economic Affairs) Duvvuri Krishna said several other States and the Centre are also giving guarantees for the PSUs to raise funds.
He pointed out that the State government guarantees by the time of bifurcation were Rs 14,028 crore. The guarantees increased by 4 to 5 times in the TDP regime (2014 to 19) and amounted to Rs 63,644 crore.
Speaking to mediapersons in the Secretariat on Wednesday, Krishna said the power of the State to borrow under Article 293 (1) of the Constitution is subject to consent from the Centre, but the giving of guarantees does not require any consent from the Union Government. Hence, the raising of loans by the PSUs with the guarantees given by the State government cannot be referred to as a Constitutional violation, he asserted.
Finding fault with the opposition parties and a section of the media for the allegations against the government, he said attempts are being made to create fear in the minds of bankers and other lending agencies by making irresponsible charges that providing loans to the PUS is unconstitutional and a crime.
Taking a dig at former Finance minister Yanamala Ramakrishnudu for his remarks that the State government is availing of budget borrowings to the tune of Rs 1 lakh crore every year, he said over the last three years, the outstanding State government-guaranteed PSU debt has increased from Rs 63,664.64 crore to Rs 1,17,503 crore, even after including borrowings which are guaranteed only on conditional basis, and not crystalised as on date.
Stating that the Finance Department has provided a detailed explanation to the Comptroller and Auditor General (CAG), he said the stated amount of Rs 48,384 crore was majorly in the form of adjustments, and of that amount, only Rs 224.73 crore was in the nature of cash transactions.
The CFMS system is still in the process of development and stabilisation as some of the modules are yet to be developed and owing to the need to prevent any delay in finalisation of accounts, some adjustment entries were carried out. The nature of each entry was described in detail and placed in the public domain by the Finance Ministry to ensure transparency, he explained.