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Telangana brings Ordinance to raise borrowing limit under FRBM
Despite claims that Telangana is still a rich state, the slump in the economy following the long national lockdown imposed by the Centre resulted in near-zero revenue during the first quarter of the new budget year forcing the state government to agree to the terms & conditions by the Centre to become eligible for the enhanced Fiscal Responsibility and Budget Maintenance (FRBM).
Hyderabad: Despite claims that Telangana is still a rich state, the slump in the economy following the long national lockdown imposed by the Centre resulted in near-zero revenue during the first quarter of the new budget year forcing the state government to agree to the terms & conditions by the Centre to become eligible for the enhanced Fiscal Responsibility and Budget Maintenance (FRBM). As part of this exercise, the government on Tuesday promulgated the Telangana FRBM Ordinance 2020. The ordinance says "There is a requirement of additional resources to meet the unforeseen expenditure in connection with the Covid-19 relief operations and hence there is a need to augment the revenues.
It further said that the Government of India had allowed additional borrowing up to 2 per cent of GSDP over and above the normal limit of 3 per cent (Up to 5 per cent of GSDP) during the financial year 2020-2021, subject to carrying necessary amendments to the FRBM Act 2005 ".
Good ranking in Ease of Doing Business, achievements in 'one nation - one ration' card and promoting urban local bodies self-reliant by increasing revenues will help to avail the FRBM limit by 4 to 4.5 per cent. However, the state government sources say that there is no change in their stand in regard to privatisation of power distribution. Such a proposal would be detrimental to the ongoing welfare schemes like 24-hour free power to farmers and subsidised energy supply to domestic and industrial needs." The government proposes to convince the Centre to exempt them from this one condition.
