HYDERABAD: With the war of words between the BJP and the TRS intensifying after Prime Minister Narendra Modi’s visit to the State on Thursday, the expected ‘political decision’ on Fiscal Responsibility and Budget Management (FRBM) loans is not in favour of the State. The Union Finance Ministry once again denied permission to Telangana to raise FRBM loans.
The Reserve Bank of India (RBI), in its notification on Friday, permitted 11 States to raise FRBM loans. Notably, Telangana was not among these 11 States. The Telangana government had planned to raise Rs 3,000 crore on May 31.
The changed rules for FRBM are, in fact, adverse to Andhra Pradesh, Telangana and Kerala. However, this time the RBI even allowed Kerala to go for open market borrowings (OMB). The 11 States proposed to raise loans worth Rs 21,450 crore on May 31.
Finance Ministry officials told the officials of the Telangana government last week that they had left it to Union Finance Minister Nirmala Sitharaman to take a decision whether to permit Telangana to raise loans or not.
The State government officials had been hoping against hope that the “political decision” would be in favour of Telangana. However, the Ministry belied their hopes this week too. In the first two months of this financial year, the State planned to raise Rs 11,000 crore loan. In June, the State proposed to raise another Rs 4,000 crore.
With the ‘political decision’ not in favour of Telangana, the State government will find arranging funds for paying the Rythu Bandhu amounts to farmers in June a daunting task ahead of the commencement of the agriculture season.