Telangana forced to borrow Rs 12,358 crore from RBI

SDF is a facility that state governments can avail against the collateral of Consolidated Sinking Fund, Guarantee Redemption Fund & Auction Treasury Bills (balances and other investments in government securities.
Telangana forced to borrow Rs 12,358 crore from RBI

HYDERABAD: Struggling with a financial crisis, the state government is continuing to depend on Overdrafts (OD), Ways and Means Advances (WMA) and Special Drawing Facility (SDF) from the Reserve Bank of India (RBI) to meet its expenditure.

From December 2023, when it came to power, to March 31, 2024, the Congress government in Telangana has raised Rs 12,358.48 crore through these avenues.

According to the RBI, from December 2023 to the end of March this year, the state government raised Rs 5,629.94 crore through WMA, a facility allowed by the RBI to states for meeting temporary cash mismatches. The state government availed this facility for 105 days. Similarly, in the same period, the government availed OD facility for 57 days, raising Rs 3,143.14 crore. As per RBI rules, OD can be availed by state governments beyond their WMA limits.

Similarly, from December 2023 to March 31, 2024, the Congress government in the state availed Special Drawing Facility (SDF) almost every day, except in December when it availed the facility for 20 days. In these four months, the state government raised Rs 3,585.4 crore through SDF, availing the facility every single day in January, February and March.

SDF is a facility that state governments can avail against the collateral of Consolidated Sinking Fund, Guarantee Redemption Fund & Auction Treasury Bills (balances and other investments in government securities.

Interestingly, the Congress government used to criticise the BRS regime for raising funds through the WMA and OD. Even the white paper on state finances released by the Congress administration soon after assuming power harshly criticised the BRS regime for relying heavily on WMA.

For 214 of the 244 days it was in power in financial year 2023-24, the then BRS government had utilised OD and WMA — from April 1 to November 2023. After the Congress came to power, it utilised OD and WMA for 105 of the 122 days — from December 2023 to March 31, 2024.

Telangana forced to borrow Rs 12,358 crore from RBI
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