Telangana debt burden may zoom over 2.30 lakh crore

Hyderabad: With the State's finances remains precarious due to current Covid pandemic, Telangana's outstanding debt is likely to go up more than the projected Rs 2.30 lakh crore in the current financial year as the government relies more on borrowings to meet the financial requirements in the current crisis.

While Telangana already occupies sixth position in RBI ranking among the States seeking borrowings, officials said that in just two years, Telangana borrowings from open market are set to be doubled from Rs 22,000 crore in 2018 to Rs 40,000 crore in 2020.

Officials said that the State had 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 2019-20, the outstanding debt was Rs 1.99 lakh crore and it is projected Rs 2.29 lakh crore this year. The current trends shows that the debt burden will cross Rs 2.40 crore if the government seek more borrowings by utilising the increased borrowing limit from 3 per cent to 5 per cent under the FRBM (Fiscal Responsibility and Business Management) Act. The government resorts Rs 3,500 crore institutional borrowing every month.

The State's total debt burden in 2015-16 was Rs 97,992 crore. It increased to Rs 1.34 lakh crore in 2016-17 and Rs 1.52 lakh crore in 2017-18. In 2018-19, the debt burden on the State exchequer was Rs 1.75 lakh crore.

Officials said that it required Rs 3,000 crore alone for the payment of debts of different financial institutions and another Rs 4,000 crore for payment of salaries of the government employees and disbursement of pension under various social security schemes. In the corona crisis, the State revenues declined drastically. To meet the financial requirements, the only option before the government is to go for borrowings. "Unless the centre announced moratorium on payments of the State debts, Telangana would not come out of the debt trap this year", a senior official of State Finance department said and added that the total budget outlay for 2020-21 was Rs 1.82 lakh crore. The current financial trends gave clear indication that the outlay will cut down by 30 per cent in the revised estimations.

The government is already planning to increase the State revenues by selling the costly lands in Greater Hyderabad limits and grow income from non tax revenues through mineral mining mainly by auctioning the sand reaches along river Krishna and Godavari projects.