Centre permits TS to borrow Rs 12,500 crore in Q1 of FY 2023-24

Hyderabad: The Centre has permitted Telangana state government to borrow Rs 12,500 crore through auction of bonds in the first quarter of the new fiscal (2023-24 April-June). The Reserve Bank of India (RBI) on Friday released the weekly auction schedule of states for the first quarter of the new financial year on Saturday.

As per RBI schedule, the TS government was allowed to borrow Rs 2,000 crore on April 11, Rs 1,000 crore on April 18, Rs 1,000 crore on April 25, Rs 1,000 crore on May 9, Rs 1,000 crore on May 16, Rs 1,500 crore on May 30, Rs 1,500 crore on June 6, Rs 1,500 crore on June 20 and Rs 2,000 crore on June 26.

It may be recalled that the Centre denied permission to TS government to raise loans in the first quarter of the previous fiscal (April-June 2022-23) citing its huge off-budget borrowings. The Centre pointed to the government borrowing through corporations by giving bank guarantees.

With this, the state government could not raise loans in the first two months of the previous fiscal (April and May). Finally, after repeated requests by the state government, the Centre permitted the state government to raise loans from June.

Due to the restrictions imposed by the Centre on the loans, the state government could not borrow nearly Rs 14,000 crore that was provisioned in the Budget in the 2022-23 fiscal, which ended on Friday.

The state government proposed to obtain Rs 53,970 crore loans but could raise only Rs 40,150 crore on account of Centre's restrictions.

For the new fiscal 2023-24, the state government proposed to raise Rs 40,615 crore through auction of bonds. It remains to be seen how much the Centre would permit for this fiscal after granting approval to raise Rs 12,500 in the first quarter.