Union Government allows Telangana Government to borrow financial resources through Open Market Borrowings
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Hyderabad: Telangana has got an instant relief from the current financial crisis during the corona pandemic. The Union Government granted permission to Telangana Government to raise additional financial resources of Rs 2,508 crore through Open Market Borrowings. Telangana state was one among the five states which has been permitted to go for more borrowings. The other states are Andhra Pradesh, Karnataka, Goa and Tripura.
The TS officials said that Telangana complied with the conditions and targets set by the Centre to raise additional borrowings by the states from the open market. The important conditions which includes the successful implementation of One Nation One Ration Card system, Ease of Doing Business, urban body reforms and power sector reforms.
The Union Finance Ministry on Thursday informed the state counterparts that the Centre satisfied with the performance of Telangana and permitted to go for additional borrowings. In view of the unprecedented Covid-19 pandemic, the Centre had recently allowed additional borrowing limit of up to 2 per cent of Gross State Domestic Product (GSDP) to all the States for the year 2020-21.
Officials said that 1 per cent of the borrowings were made available till September and the remaining 1 per cent will be granted in the next two months.
The officials said that to tide over the financial crisis, the TS government was exploring many options. "The T -State is raising Rs 23,400 crore at 3 per cent of the GSDP every year. The additional borrowing limit will give some relief to the state which required huge funds to meet the welfare schemes, Aasra pensions and the salaries of government employees.
The state had already borrowed Rs 15,000 crore in just four months from April to July and planning to borrow Rs 15,000 crore from August to December and another Rs 10,000 crore in the last quarter between January and March in the current financial year. In all, the borrowing burden on Telangana state in the current financial will be likely around Rs 40,000 crore as against Rs 20,000 crore in the previous years.