Centre's delay on finalisation of borrowing limit puts Telangana govt in limbo

Every year, the Central government announces a borrowing limit for states.

Update: 2017-06-03 20:40 GMT
The ceiling of financial powers to these authorities were decided about 15 years ago. (Representational image)

Hyderabad: There has been a delay in the finalisation of a borrowing limit for the current financial year by the Central government; and this delay is causing the Telangana State government, which is facing a financial crisis, some anxiety. The Telangana  government has requested the Centre to set a borrowing limit for the state without waiting for other states to submit the necessary details.

Every year, the Central government announces a borrowing limit for states. This limit is decided based on the Gross State Domestic Product (GSDP). In keeping with standard procedure, the Cen-tre has all State governments to submit GSDP details. Telangana and a few other states have submitted the requisite details to the Centre. Based on the budget, Telangana’s GSDP for 2017-18, at current prices, is estimated to be Rs 7,49,893 crore. This is 14.6 per cent higher than the estimate for 2016-17.

The Central government has issued the Telangana government provisional approval to raise market borrowings for a period of nine months, based on last year’s GSDP. In FY17, the Centre had set a market borrowing limit of Rs 18,000 crore for TS.

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