Telangana government will need Rs 1.78 lakh crore in seven years to fund irrigation projects

Apart from servicing the debt, the State government is also committed to fund 20 capital intensive irrigation projects which are in various stages of construction.

Published: 27th March 2021 08:15 AM  |   Last Updated: 27th March 2021 08:15 AM   |  A+A-

Irrigation Project

For representational purposes (Photo | EPS)

By Express News Service

HYDERABAD: The State government's internal debt from market and financial institutions, among others, was Rs 1,56,933 crore and loans and advances from the Government of India was Rs 8,231 crore, totalling to Rs 1,65,164 crore, according to the CAG report, which was tabled in the State Legislature on Friday.

Apart from servicing the debt, the State government is also committed to fund 20 capital intensive irrigation projects which are in various stages of construction. The revised cost of these projects is Rs 1,87,848 crore, of which Rs 1,00,494 crore was spent.

This leaves a further financial requirement of Rs 87,354 crore on the delayed projects. There are another six ongoing projects, whose cost is estimated at Rs 19,360 crore. Thus, the government will need to gather more than Rs 1.78 lakh crore over the next seven years to meet its commitments.  

The government also carries a direct contingent liability for another Rs 77,713 crore by way of guarantees mainly on account of the Telangana Drinking Water Supply Corporation for Mission Bhagiratha (Rs 23,014 crore) and the Kaleshwaram Irrigation Project Corporation Limited (KIPCL) for the Kaleshwaram project (Rs 27,990 crore). 

In view of the mention in the Kaleshwaram project’s DPR that the project would hardly generate any revenue, the government would have to shoulder the responsibility of repaying the loans taken by the KIPCL in case it is unable to generate enough resources for servicing the debts.

'Debts have not increased'

Meanwhile, Chief Minister K Chandrasekhar Rao said in the Assembly on Friday that the State’s debts are within the limits and have not increased as alleged by Congress Legislature Party (CLP) leader Mallu Bhatti Vikramarka.

"Bhatti talked as if the State will go bankrupt. Do not create panic among the people. The State is in the 25th place among all the States in taking debts. The loans taken by the State are being spent on capital expenditure. We are number one in the country in capital expenditure. In the last six years, Telangana spent Rs 2,34,153 crore on capital expenditure," the Chief Minister said.

He also quoted reports of the RBI and others, which lauded the economic buoyancy of the State. "Telangana never defaulted on repayment of debts. It has trust in the market. We are taking loans for 30- and 40-year tenure," he added.

The CAG report on finances also highlighted that the Special Development Funds (SDF) meant for SCs and STs were not fully spent. "As per the Act, all the departments should earmark at least 15.45 per cent and 9.08 per cent of the total outlay in the Budget exclusively under the Scheduled Castes and Scheduled Tribes Special Development Funds (SCSDF and STSDF), respectively. Programmes under the SCSDF and STSDF include subsidies for scholarships and construction of roads in SC/ST hamlets, among others," the CAG said. 

"The government allocated Rs 16,452.79 crore and Rs 9,693.12 crore to the SCSDF and STSDF respectively in 2018-19, but 62 per cent and 43 per cent of the allocated funds were not utilised. This issue was reported earlier too, as the utilisation was only 54 per cent each under SCSDF and STSDF in 2017-18 and 60 per cent and 57 per cent respectively in 2016-17," it added.

Rush expenditure

Maintaining a uniform pace of expenditure is a crucial component of sound public financial management. Any rush of expenditure in the closing month of the financial year should be avoided. Of the total expenditure of Rs 1,61,570.20 crore for 2018-19, Rs 55,077.98 crore (34.09 per cent) was spent in the last quarter. 

However, it was observed that Rs 50,179.11 crore (32.92 per cent of the total receipts of Rs 1,52,447.94 crore) was received during the last quarter only.

The expenditure during the last quarter this year was higher by 6.03 percentage points in comparison to 2017-18 when the expenditure during the last quarter was Rs 41,848.98 crore (28.06 per cent of the total expenditure of Rs 1,49,127.91 crore). 

The CAG report stated that a budget provision of Rs 2,400 crore was allocated to power projects. Of this, expenditure of Rs 1,800 crore (75 per cent) was incurred in March 2019. The report focused on the expenditure without Budget provisions authorised by the Legislature in the earlier years. This trend, however, continued in 2018-19 also. 

An expenditure of Rs 3,507.17 crore was incurred (at sub-head level) on various schemes without any Budget provision, i.e., either in original or in supplementary provisions in 34 cases in 2018-19. Of this, in 10 cases, expenditure of Rs 442.11 crore was incurred through issue of re-appropriation orders. 

These amounts were mainly spent on: loans to the Telangana State Scheduled Castes Cooperative Development Corporation Limited (Rs 1,500.00 crore), loans to the Telangana State Scheduled Tribes Cooperative Finance Corporation Limited (Rs 900.00 crore), subvention from the Central Road Fund (Rs 279.08 crore), transfer to Rural Development Fund (Rs 144.85 crore), Nationwide Emergency Response System (Rs 25.00 crore) and loans to Transco for modernisation and strengthening of the transmission system in the Hyderabad Metropolitan Area (Rs 16.10 crore). 


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