BRS government availed overdrafts including Rs 35,425 crore for 145 days: CAG
While overdrafts are commonly used for short-term liquidity needs, prolonged reliance indicates serious fiscal strain and an imbalance between revenue and expenditure, the report said
Hyderabad: Telangana’s cash balance during the BRS government tenure in 2023-24 dropped to just Rs 1.38 crore, despite accessing ways and means advances (WMA) and the special drawing facility (SDF). This forced the BRS government to depend on overdrafts for an extended period, the Comptroller and Auditor General (CAG) has said in its report.
According to the CAG report tabled in the Assembly on Thursday, the BRS government availed overdrafts including Rs 35,425 crore for 145 days after its cash balance fell below the Reserve Bank of India's (RBI) prescribed limit.
While overdrafts are commonly used for short-term liquidity needs, prolonged reliance indicates serious fiscal strain and an imbalance between revenue and expenditure, the report said.
Overdrafts also incur interest charges, adding to the state’s financial burden. Exceeding the standard overdraft period often requires special RBI approval, highlighting the severity of the situation. Typically, states resort to WMA and SDF before taking overdrafts, making Telangana’s prolonged dependence on this facility highly unusual and reflective of deeper financial mismanagement, according to the report.
The extended use of overdrafts underscored the need for stronger fiscal management strategies to reduce reliance on short-term borrowing and ensure better financial stability, the CAG said.
