HYDERABAD: It’s official. The Finance Ministry has cut Telangana’s open market borrowing limit by Rs 19,000 crore for this financial year. This means that the State will now be able to raise only Rs 34,970 crore in 2022-23, as against the Rs 53,970 crore Fiscal Responsibility and Budget Management (FRBM) loan proposed in the Budget.
With the chances of getting around Rs 41,000 crore grant-in-aids contributions estimated in the Budget too looking bleak, the State Budget will fall short by at least Rs 50,000 crore. With the new conditions put in by the Finance Ministry this year for raising FRBM loans, the State government was unable to raise loans in the first two months of this fiscal.
Finally, the Centre allowed the State to raise the loans on an ad-hoc basis in June. Recently, the Finance Ministry indicated to the State that it would cut the FRBM loan by Rs 19,000 crore for 2022-23. With this, the State can raise only Rs 34,970 crore in this financial year.
Now that there is some clarity on the quantum of loans, the State government has decided to augment its resources to continue the welfare schemes and developmental activities. The size of the Budget for 2022-23 is Rs 2.56 lakh crore. The State may get around Rs 10,000 crore as grant-in-aid and the expected shortfall may come around to Rs 31,000 crore. The shortfall in FRBM loans is Rs 19,000 crore. With this, the size of the Budget may be reduced by Rs 50,000 crore. “We are exploring other options to generate additional financial resources,” Finance Minister T Harish Rao told Express on Tuesday.
He assured that the government would include new beneficiaries aged above 57 in the Aasara pensions ambit as promised. The launch date would be announced by Chief Minister K Chandrasekhar Rao, he added.After the Finance Ministry allowed the State to raise FRBM loans, Telangana raised Rs 10,000 crore through open market borrowings -- Rs 7,000 crore in June and another Rs 3,000 crore on Tuesday.
Though the State is within the permissible limits in debts and better placed than several other States in fiscal indicators, the denial of loans was attributed to ‘politics’. “It all depends on the Centre-State relations,” a source in the State Finance department remarked.