Telangana to take Rs 10,000 crore from World Bank

Hyderabad: The 43 per cent fitment (basic salary hike) and special TS increment given to 3.50 lakh government employees and pensioners and 44 per cent fitment for RTC staff has also imposed a heavy salary burden on the government. The state government is now seeking further relaxation of FRBM norms from the Centre to enable it to borrow more money.

While the ideal budget ratio of non-plan, plan expenditure should be 50:50, the TS government has taken this to 60:40 and officials fear that it may touch 70:30 if amounts secured through loans are utilised in an unplanned manner.

The government has been mobilising funds though market borrowing every month since September 2014 with a repayment deadline of 10 years. The market borrowings were secured at an interest rate of 9 per cent, while Rs 24,000 crore loan was taken from the Rural Electrification Corporation and Rs 4,000 crore loans from Power Finance Corporation, both at 11 per cent interest. The TS government is in the process of inking a deal with the World Bank for another Rs 10,000 crore at about 3.3 per cent interest.

The Forum For Good Governance, which obtained the information about loans through RTI, said the loans being secured for higher interest rates should be utilised judiciously for development programmes but the government was using them on populist schemes and salary hikes for staff.