Telangana\'s market borrowings to hit Rs.18,000 crore

HYDERABAD: Market borrowings of Telangana state government in the current fiscal (2022-23) will touch Rs. 18,000 crore with the Reserve Bank of India (RBI) set to auction  bonds on Tuesday to raise another Rs 500 crore.

The government is eligible to borrow Rs. 53,970 crore (3.5 per cent of the Gross State Domestic Product) in the current fiscal 2022-23 as per the provisions of the FRBM Act from the market. However, the Union finance ministry has recently communicated to the state government that Net Borrowing Ceiling (NBC) for Telangana has been fixed at Rs. 42,428 crore, taking into account the off-budget borrowing through various corporations and bank guarantees given in the last three years.

If restrictions on off-budget borrowing are taken into account, the total loan cuts imposed on Telangana will be Rs. 15,033 crore. If only market borrowings are considered, the state government is left with a balance of Rs. 24,428 crore that it can borrow till March 31, 2023.

The state government has sought permission to raise Rs. 9,000 crore in the second quarter (July-September) through auction of bonds by the RBI. However, the Centre permitted the government to raise Rs, 10,500 crore till September 20, which is Rs. 1,500 crore more than it had sought.

Contrary to this, the state government faced huge cuts in the first quarter (April-June). The state government had sought permission to raise Rs. 15,000 crore through auction of bonds from April to June. The Centre halted loans completely in April and May and allowed the state government to raise loans of just Rs. 7,000 crore in June resulting in a deficit of Rs. 8,000 crore.

Funds funda

Rs. 53,970 crore - TS eligible to borrow in 2022-23 under the FRBM Act

Rs. 42,428 crore - Ceiling on borrowing imposed by Union finance ministry

Rs. 9,000 crore - TS wanted to raise in July-September

Rs.10,500 crore - Borrowing Centre permitted till September 20

Rs. 15,000 crore - TS wanted to raise via bonds from April to June

Rs. 7,000 crore - Loans Centre allowed for TS  in June, resulting in Rs. 8,000 crore shortfall