Financial pressure: Telangana needs to repay borrowings of Rs 2.86 lakh cr in 10 years, says CAG
The Telangana government is obligated to repay over Rs 2.67 lakh crore loans borrowed from the market, both principal and interest by FY33, even as the Gross State Domestic Product (at current prices) grew at an average growth rate of 15.09 per cent from Rs 8.60 lakh crore in 2018-19 to Rs 13.13 lakh crore in 2022-23, said CAG report on Friday.
Hyderabad: The Telangana government is obligated to repay over Rs 2.67 lakh crore loans borrowed from the market, both principal and interest by FY33, even as the Gross State Domestic Product (at current prices) grew at an average growth rate of 15.09 per cent from Rs 8.60 lakh crore in 2018-19 to Rs 13.13 lakh crore in 2022-23, said CAG report on Friday.
According to the report (for 2022-23) by Comptroller and Auditor General (CAG) which was placed in the state legislature, besides market borrowings, the state government will also have a liability to repay Rs 19,210 crore as principal in the next nine years in respect of borrowings taken from some financial institutions such as National Small Saving Fund and LIC.
“As can be seen from the above table, the state government will have to repay Rs 2,67,018 crore as principal and interest on the market borrowings in the next ten years by 2032-33,” the auditor said.
The borrowings of the state governments are governed by Article 293 of the Constitution as they borrow money from the market for implementation of various state plan programmes and fulfilment of fiscal liabilities.
“Apart from this, the state government will also have a liability to repay Rs 19,210 crore as principal in the next ten years in respect of borrowings taken from the following financial institutions…,” it further said.
The figures suggest that the state government will have to mobilise substantial amount, over Rs 2.86 lakh crore, by 2032-33 for servicing of public debt and this could put significant pressure on the state finances, CAG opined.
Considering the off-Budget borrowings (OBB) Rs 1.19 lakh crore and other liabilities for the year 2022-23, which are being serviced out of the State Budget, the ratio of Debt to GSDP would be 35.64 per cent, which is 10.64 per cent above the set target of 25 per cent as per the TSFRBM Act (Telangana State FRBM), the report said.
This is also 5.94 per cent above the limit (29.70 per cent) prescribed by the XV Finance Commission., it further said.
During 2022-23, the Telangana government resorted to Ways and Means Advances for almost the entire year, except 24 days.
Ways and Means Advances is a temporary facility for the Centre and the state to borrow money from Reserve Bank of India.
