Telangana groaning under rising debt burden: CAG report

A major dilemma before the ‘welfare’ State of Telangana is whether to augment resources or curtail expenditure to meet the increasing debt repayment burden over the next seven years. 
For representational purposes (Express Illustrations)
For representational purposes (Express Illustrations)

HYDERABAD: A major dilemma before the 'welfare' State of Telangana is whether to augment resources or curtail expenditure to meet the increasing debt repayment burden over the next seven years. 

The Comptroller and Auditor General (CAG) report for the year ended March 2019, which was tabled in the State Legislature on Friday, red-flagged the increasing debt burden and highlighted the 'rush expenditure' of the State government.

"The maturity profile of outstanding stock of public debt as on March 31, 2019 showed that 46 per cent, Rs 76,262 crore, of the total outstanding debt was to be repaid in the next seven years and the balance thereafter. Greater reliance on market borrowings by the government in recent years has led to an increase in liabilities on account of interest payments. As a result, the interest payments relative to revenue receipts were much higher, at 12.41 per cent as against the target of 8.37 per cent fixed by the 14th Finance Commission," the CAG report stated.

Of the Rs 26,742-crore market borrowings made in 2018-19, repayment of 51 per cent (Rs 13,718 crore) is due in 2043 and 23 per cent (Rs 6,250 crore) in 2038. The report said that this indicates that in 2018-19, the government has been, borrowing loans with longer maturity of 20 and 25 years, with interest rates ranging from 7.75 per cent to 8.75 per cent.

Also, the internal debt from market and financial institutions, among others, was Rs 1,56,933 crore and loans and advances from the Centre was Rs 8,231 crore, a total of Rs 1,65,164 crore. 

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