HYDERABAD: Union Finance Minister Nirmala Sitharaman responded positively to Telangana Finance Minister T Harish Rao’s request to increase the borrowing limit under the Fiscal Responsibility and Budget Management (FRBM) Act from the present four per cent to five per cent.
While participating in the Goods and Services Tax (GST) Council meeting on Saturday from BRKR Bhavan, Harish Rao informed Sitharaman that Telangana had suffered a revenue loss of Rs 4,100 crore in May due to the implementation of the lockdown. In light of this, he requested her to increase the borrowing limit.
Sitharaman assured Harish Rao that she would examine the same. Harish Rao said that the State was facing financial problems due to the lockdown and they did not know for how long the lockdown would continue. If the borrowing limit was increased under the FRBM Act, then the economic activity of the State would pick up and more employment could be provided to citizens, he said.
If the Centre increases the borrowing limit to five per cent, the State can raise an additional Rs 10,500 crore loan in the current fiscal. The State has proposed to borrow Rs 49,300 crore State Development Loans in the 2021-22 Budget. It may be mentioned here that the State has already raised loans of Rs 7,500 crore so far in the first quarter of the current fiscal and is raising another Rs 3,000 crore State Development Loan on June 15. Harish Rao supported the GST Council’s decision to reduce the tax on Covid-19 related materials.
He wanted the Centre to provide Covid-19 vaccine doses to the States at the earliest and import vaccine doses as per the country’s requirement. The vaccination drive should be expedited in the wake of warnings of a third wave of Covid- 19, he suggested to the Centre.