Telangana paid debt with borrowings

Hyderabad: The CAG has cautioned the state government that it will have to borrow further to repay its loans. The government utilised 34.74 per cent of borrowed funds in 2016-17 for repaying its existing debt which increased by 18 per cent over the previous year.  The CAG said “A well thought out debt repayment strategy would have to be worked out by the government to obviate additional borrowings.”

During 2016-17, the government debt at 18.76 per cent of GSDP, an increase of 2.55 percentage points over the previous year. CAG said that the interest payments as a percentage of revenue receipts was 10.4 per cent against the normative rate of 8.22 per cent prescribed by the 14th Finance Commission. The total debt in 2016-17 was Rs 1.21 lakh crore, which is 31 per cent more than Rs 91,985 crore in the previous year. While the state used 7.12 per cent of its tax revenue to repay the debt in 2015-16, it had to allocate 32.16 per cent of tax revenue for the same during 2016-17.