Centre allows Telangana to borrow more, not Andhra Pradesh

Visakhapatnam: The Department of Expenditure under the Union Finance Ministry on Friday gave its nod to seven states including Telangana to borrow an additional Rs 16,691 crore to boost capital expenditure. AP has not been granted the nod.

It was explained that these states achieved the targets set by the ministry for capital expenditure up to the second-quarter ending in June, and hence the permission was granted. Telangana can borrow an additional Rs 5,392 crore.

A state needs to achieve at least 15 per cent of the target by first quarter, 45 per cent by the second quarter, 70 per cent by the third quarter and the remaining balance by March 2022.

In the first round’s review in September, additional borrowing permission of Rs 15,721 crore was issued to 11 states for meeting the target set for the first quarter. With the two rounds, the total additional borrowing permission of Rs 32,412 crore was issued.

In this round, capital expenditure achieved till September 30 was assessed in respect of 22 states. Eligibility of the remaining six states will be assessed on availability of data from the Comptroller and Auditor General of India (CAG). “Andhra Pradesh may get a chance in this round if the target is achieved,” a financial analyst said. The third round will be in March on the basis of capital expenditure incurred by the states during the first three-quarters of the fiscal.

The capital expenditure-linked borrowing ceiling of 0.50 per cent of gross state domestic product (GSDP) will be allowed to states that achieve actual capital expenditure of at least 70 per cent of the set target by December 31.

There would be a final review of the actual capital expenditure by the states in June next year. Any shortfall or deficiency in actual capital expenditure in comparison with targeted capital expenditure will be adjusted from the borrowing ceiling of the state for 2022-23.