government has requested permission from theReserve Bank Of India(RBI) to raise another Rs 13,562 croreloanin thefinal quarterof the current financial year.
With this, the total loan raised this year will be Rs 48,562 crore and the cumulative loan burden will reach 2.86 lakh crore. But Telangana’s fiscal Health seem reasonable when compared nationally as it will still be second last in terms of the ratio of gross domestic product as a Percentage of loans.
The loan requirement is mostly to feed the state’s ambitious welfare programmes. Despite the economic slowdown due to Covid-19, the state had managed to achieve a good Growth rate, but the income is not enough to finance its schemes as payments for it have also increased proportionately.
This fiscal year the State Government intends to implement the Dalit Bandhu scheme and has also begun releasing funds for Rythu Bandhu.
The state government was scheduled to raise Rs 8,000 crore, Rs 6,000 crore and Rs 6,295 crore in the first, second and third quarter of the year respectively, according to the original indicative loan calendar. The rest of the requirements were to be raised in the fourth quarter.
Instead, the state borrowed more than planned. In the first quarter it was Rs 15,000 crore, in second and third quarters it touched Rs 10,000 crore and in the fourth it has proposed to borrow 13,562 crore.
According to the Fiscal Responsibility and Budget Management (FRBM) Act, 25% of the state’s total GDP can be considered the upper limit of the total loans raised by the state.