Image for representation purpose only.
| Photo Credit: K. Pichumani
The Telangana Government has apparently landed in a piquant situation in raising resources through open market borrowings for the January-March quarter of the current financial year.
The government, according to the indicative calendar of the Reserve Bank of India (RBI), indicated that it will raise ₹13,000 crore during the last quarter through auction of securities. Accordingly, it said it proposed to raise ₹1,000 crore during the auctions to be conducted by the RBI on January 9 as the first instalment.
The State has however not submitted its indent for raising the amount on January 9 going by the list of States which offered to sell stock by way of an auction released by the RBI. “We are yet to get permission from the Central Government,” a senior Finance department official said when asked why the State backed out from the auction of securities.
Interestingly, the State had already exceeded the limit of borrowings set by the Union Finance Ministry for the current fiscal. The Ministry said the borrowing limit for Telangana for the current fiscal was arrived at ₹57,813 crore but had been reduced to ₹42,225 crore after adjusting the overborrowing of the previous financial years amounting to ₹15,588 crore.
The State had exceeded this limit by December end. According to the provisional data submitted to the Comptroller and Auditor General of India, the State borrowed ₹38,151 crore till October end as against the ₹38,234 crore borrowings projected for the full financial year in the budget estimates.
The State raised another ₹4,400 crore in November and December through the auction of securities taking the total borrowings to ₹42,551 crore over ₹300 crore higher than the limit fixed by the Union Ministry. The State faced cuts in borrowing limits even during the previous fiscal when it could raise ₹32,119 crore during 2022-23 as against the ₹52,167 crore projected in the budget estimates.
It was after Finance Special Chief Secretary K. Ramakrishna Rao’s repeated visits to the New Delhi appealing the Union Finance Ministry to relax restrictions on borrowings that the Centre had allowed the State to opt for market borrowings. Given the commitments the new Congress Government have and shortfall of revenue resources, uncertainty looms large over the quantum of borrowings that would be allowed in the last quarter.
