HYDERABAD: A major financial crisis looms large on the TRS government in the State. The Reserve Bank of India (RBI) has denied permission to the State government to participate in the auction for open market borrowings scheduled on May 17.
The chilling implication of RBI's decision is that the government would have less money in its coffers to fund various ongoing welfare schemes at a time when the TRS is preparing for Assembly elections next year.
The RBI's decision must have left a bitter taste in the mouth of the honchos of the Finance Department when they could not find the name of Telangana in the schedule issued by the Central Bank on Thursday for the auctioning of securities of the State governments on May 17.
Only three States -- AP, Maharashtra and Rajasthan are allowed to participate in the auction. As per the loan calendar, Telangana is supposed to raise Rs 2,000 crore on May 17. According to the indicative calendar of the RBI, the total loans to be raised by Telangana in April and May are Rs 8,000 crore.
The chances of the State raising loans in the next 10 months of this financial year are remote as the Centre is not satisfied with the replies furnished by the State on the loans it had been raising. The State may not send further replies to the Centre as it believes the freeze on raising loans was a vindictive measure towards the "performing" State.
"There is no approval for us to raise the loan on May 17. Let us see how many days the Centre will prevent us from raising loans. We will chalk out a plan in the next one week to 10 days," a top official in the Finance Department told The New Indian Express.
SPENDING CUT LIKELY
Farm loan waiver
Dalit Bandhu
Mana Ooru-Mana Badi
NO CUT
Salaries to govt employees
Aasara pensions
Rs 3 lakh cash for 2BHK scheme
Rythu Bandhu
Interest payments