Telangana to pay Rs 25,000 crore united debt in next 6 years

Hyderabad: In the next six years, the Telangana government will have to repay Rs 25,000 crore to funding agencies. This is the state’s share of the money in the total Rs 60,000, raised by the undivided state through the sale of bonds. These loans have to be repaid within 10 years.

The RBI is yet to distribute the total debt of united state, which stands at Rs 1.79 lakh crore as on March 2014. Officials estimate that Telangana’s share would be nearly Rs 75,000 crore, based on the 48:52 ratio. The undivided state also owed Rs 20,000 crore to the Centre. This, too, needs to be distributed between both the states.

The Telangana government is seeking waiver of these loans from the Centre. It will discuss the issue with the 14th Finance Commission which is expected to arrive in the state soon.

But the issue of repaying bond purchasers is more urgent. The buyers have to be repaid in 10 years, that too at higher interest rates. “Already four years have lapsed and we need to commence repayment now to meet the target in next six years,” sources in the finance department said. The sources said the government cannot sell more bonds to raise finances, as the RBI objects to it.

“The RBI is under tremendous pressure from almost all the states to auction bonds to raise funds. The undivided state had raised Rs 60,000 crore and another Rs 3,000 crore was raised by the Telangana government,” the sources said. The loans have not been divided between the states because the Comptroller and Auditor-General is involved in the process. The share of each state in project-wise loans has to be worked out without giving scope for any controversies.

Both the states are mandated to pay Rs 60,000 crore to buyers in six years, of which Telangana State accounts for Rs 25,000 crore and Andhra Pradesh Rs 35,000 crore.