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Govt claim of 90% borrowing invested in capital assets creation false: Eatala
Govt mismanagement disastrous for Telangana
Hyderabad: Former Finance Minister and Huzurabad MLA Eatala Rajender on Wednesday described as false the State government's claim of spending 90 per cent of its borrowings on capital expenditure.
Addressing the media here, he explained the year-on-year debt burden of the State since the formation of Telangana, which had started as a revenue surplus State.
The State has an outstanding debit of Rs 325,709 lakh crore. Besides the guarantees given by it stand at Rs 105,007 lakh crore. Given its own tax and non-tax revenues and the Central devolution to the State, due to its reckless management of finance, the government has pushed the State into a debt trap. The State has to spend about Rs 36,000 crore annually only on debt servicing. It is only managing the principal amount payable yearly to keep its financial boat afloat.
Eatala said the government was making allocations in significant numbers in the budget. But, only to revise them later as it falls short of revenues to that of the expected revenue projects at the time of budget allocations. He found fault with the TRS and Chief Minister K Chandrashekar Rao of accusing the Centre and making baseless allegations of depriving Telangana of going for marketing borrowings.
He said the government raised loans from Central entities for Kalewsaram Irrigation Project, a consortium of bankers as well as market borrowings through the Reserve Bank of India (RBI). Even the World Bank and Asian Development Bank borrowings have to come to the State with the approval of the Centre
He added that given the current debt servicing on the borrowing, tax and non-tax revenues from the State resources makes the claims of the government that it is investing the borrowings on capital asset creation false.
Eatala dared KCR with the Finance minister for a debate on issues relating to the mounting State debt and the government claims related to status of finances. He found fault with the government for gross financial irregularities and non-compliance depending on the bloating liquor sale revenue.
"The State revenues could be managed without debt, but, the government messed up finances with no discipline, because the CM's focus has always been announcing schemes to gain political and electoral mileage, but not State development. This is proving disastrous for the State".
"Earlier, the market borrowings had a repayment period of around 15 years. However, the government has extended it to 25 years, so that someone else coming to power in future would clear the indiscriminately raised loans by his government," he rued.
