Congress tries to restore Telangana's financial health

Hyderabad: The Congress government is paying the price for the financial indiscipline of the previous BRS government. The state government is forced to pay Rs 191 crore per day towards the repayment of loans and interest due to the huge debts incurred by the BRS government over the last 10 years from June 2014 to December 2023.

Data obtained from the finance department shows that the Congress government borrowed Rs 25,118 crore in the 199 days since it came to power on December 7, 2023. But it repaid loans and interest amounting to Rs 38,040 crore, indicating that the Congress government was giving importance to putting the finances on track by reducing the massive debt burden inherited from the previous BRS government.

The state’s total outstanding debt increased tenfold since 2014, from Rs 72,658 crore to Rs 6.71 lakh crore during the BRS government’s regime till November 2023, according to the White Paper on finance tabled by the Congress government in the Legislative Assembly on December 20, 2023.

The debt in 2014 was Budget borrowing for the 2014-15 fiscal, which shot up to Rs 6,71,757 crore in 2023-24, with Budget borrowing (as per FRBM limits) accounting for Rs 3,89,673 crore.

Among others, government-guaranteed loans raised by SPVs (special purpose vehicles), but serviced by the government, accounted for Rs 1,27,208 crore, government-guaranteed loans raised and serviced by SPVs accounted for `95,462 crore and non-guaranteed loans raised and serviced by SPVs, corporations or institutions accounted for Rs 59,414 crore.

The debt service burden shot up to Rs 32,939 crore in 2023-24 from Rs 6,954 crore in 2014-15, with an annual growth rate of 22 per cent, the White Paper stated. “Despite making such a huge debt, no tangible fiscal assets in proportion to the money spent were created in the past 10 years by the BRS regime,” it read.

Deputy Chief Minister Mallu Bhatti Vikramarka, who holds the finance portfolio and tabled the White Paper, said, “From a situation of positive balances for all 100 per cent of the days in a year in 2014 to a situation where the state has a positive balance in less than 10 per cent of the days shows enormous fiscal stress. The financial condition turned worse to such an extent that the government is now forced to depend on loans even to meet day-to-day expenses.”

Cleaning the books

Right from the first month of assuming office in December 2023, the Congress government is attempting to reduce debt burden by repaying loans and interest.

Month               Borrowed                Repaid

2023

December         Rs 1,400 crore         Rs 4,754 crore

2024

January             Rs 3,000 crore         Rs 6,459 crore

February            Rs 3,000 crore         Rs 4,648 crore

March                Rs 7,718 crore         Rs 8,458 crore

April                  Rs 4,000 crore         Rs 4,450 crore

May                  Rs 4,000 crore         Rs 7,487 crore

June                  Rs 2,000 crore         Rs 1,785 crore

Total                 Rs 25,118 crore         Rs 38,041 crore