HYDERABAD: There will be a quantum leap in the Telangana government’s guarantees to various corporations, which will raise loans for capital works. The State enhanced the total government guarantees from 90 per cent of the total revenue receipts (TRR) to 200 per cent recently.
With this, it would give more guarantees to the Musi River Front Development Corporations, Kaleshwaram Corporation and others. "The government is taking up several massive projects, which require huge funds. That is why the limit has been increased from 90 per cent to 200 per cent," official sources explained.
But there are reports that the State guarantees limit was increased keeping in mind the Centre’s Electricity Amendment Bill, 2020 to take the power sector from the control of Centre. However, the sources clarified the State government’s guarantees limit was hiked to 200 per cent keeping in mind the massive projects in Telangana only and that it has nothing to do with the Electricity Amendment Bill, 2020.
The outstanding government guarantees until the 2019-20 fiscal was Rs 89,600 crore. In this year’s budget, it was mentioned that the tentative risk-weighted outstanding guarantees are estimated at Rs 40,241 crore.
Of these, the outstanding guarantees for irrigation is Rs 22,380.84 crore, while Rs 12,010.50 crore is allotted for Mission Bhagiratha and Rs 5,849.98 crore is allotted for other projects, bringing the total allotment to Rs 40,241.32 crore.
The recent Ordinance, which amended the State FRBM Act, 2005, stated that: "In clause (d) for the expression 90 per cent substitute 200 per cent."
The clause (d) of the 2005 Act says: "Limit the amount of annual incremental risk-weighted guarantees to 90 per cent of the TRR in the year preceding the current year. Provided that revenue deficit and fiscal deficit may exceed the limits specified under this section due to ground or grounds of unforeseen demands on the finances of the State government arising out of internal disturbance or natural calamity or such other exceptional grounds as the State government may specify."
The State government’s outstanding guarantees increased from Rs 18,000 crore to Rs 1.3 lakh crore in the last six years.