Telangana Govt plans to raise 35K cr through corporations

‘Abnormal’ increase in scheme and establishment expenditure has led State government to seek loans from banks to complete various programs

​Hyderabad: To meet the ‘abnormal’ increase in scheme and establishment expenditure in 2017-18 budget, the State government has decided to mobilise nearly Rs 35,000 crore through Corporations.

The total scheme and establishment expenditure has been estimated at Rs 61,000 crore and Rs 88,000 crore respectively in budget proposals this year. The total budget outlay is Rs 1.49 lakh crore.

The government has estimated Rs 60,000 crore revenue from taxes (including VAT, Excise, Transport and Land Registration), Rs 25,000 crore as central assistance and Rs 24,000 borrowings under the FRBM (Fiscal Responsibility and Budget Management) Act.

According to the government estimates, around Rs 40,000 crore is required to complete all flagship programmes, including Mission Bhagiratha, double bedroom housing, irrigation projects, sheep rearing scheme and others.

The officials of State Finance Department told The Hans India that the Centre under the FRBM act had set the limit on borrowings and it meant that the State can raise around Rs 24,000 crore loans only. “If any violation takes place the state will lose incentives offered by Finance Commission,” said officials.

Revenues generated by State government and Central assistance and institutional loans borrowed would meet only salaries, pension schemes and other regular development programmes. The government's monthly expenditure is more than Rs 9,000 crore.

But the monthly revenue is not more than Rs 7,000 crore which includes tax and non-tax revenue, grants and tax devolutions from Central government. To bridge the gap, the only option before the government is to seek funds from outside the budget by floating Corporations.

The government has already constituted Mission Bhagiratha Corporation and sought funds from the banks as the government gave counter guarantee. Nearly Rs 15,000 crore is required to complete the giant drinking water scheme. The two bedroom scheme requires Rs 10,000 crore and the funds would be sought through Telangana State Housing Development Corporation.

To meet the financial requirements for the completion of the irrigation project, government also constituted Kaleshwaram Corporation and Telangana Water Resources Development Corporation. The Corporation will seek Rs 10,000 crore from the banks.

The proposed MBC (Most backward Classes) Corporation would also help meet financial needs to take up sheep rearing and the revival of traditional occupations announced by the government. Establishment of modern saloons and distribution of washing machines to washermen community are among the other schemes announced recently.

The BC, SC, ST and Minority Corporations have already been already instructed to prepare proposals to generate funds from different sources for the execution of all developmental programmes like self employment programmes etc. All the Corporation are finalising guidelines to raise money which will not reflect in the State budget.