HYDERABAD: The Telangana state government saw no significant reductions in its market borrowings from the Centre in the second quarter of this financial year (2022-23 July-September) when compared to the first quarter (April-June).
The state government has sought permission to raise Rs 9,000 crore in the second quarter through auction of bonds by the Reserve Bank of India (RBI). Of this, the Centre already permitted the state government to raise Rs 7,500 crore till August 19.
Permission to raise Rs 1,500 crore is still pending with the Centre, and the second quarter ends in one month, in September. The state government's chances of obtaining permission to raise full loans in the second quarter appear promising.
In contrast, the state government faced significant budget cuts in the first quarter. The state government had requested permission to raise Rs 15,000 crore through bond auctions between April and June. However, the Centre suspended all loans in April and May, allowing the state government to raise only Rs 7,000 crore in June, resulting in a Rs 8,000 crore deficit.
The Centre's decision to suspend all loans to Telangana in April and May sparked a squabble between the state government and the Centre.
Chief Minister K. Chandrashekar Rao, finance minister T. Harish Rao, IT minister K.T. Rama Rao, and other TRS leaders accused the BJP-led government at the Centre of impeding Telangana state's growth by imposing economic restrictions after the state government faced a severe funding crunch to fund welfare schemes and development programmes.
Finance secretary K.Ramakrishna Rao made several trips to Delhi to persuade the Centre to grant approval to raise loans.
The Centre which imposed restrictions on borrowings on the grounds of huge off-market borrowings by the state government, however, is yet to give a clarity on the loan limit it would allow for the Telangana government for this fiscal (2022-23) although the state government sought permission to raise Rs 54,000 crore.
The RBI on Tuesday will hold e-auction to sell Telangana bonds worth Rs 1,000 crore taking the overall market borrowings in this second quarter to Rs 7,500 crore.
