The relief that the State government felt after securing permission to raise open market borrowings appears to be a short lived one.
State Finance department officials are terming the permission as “ad hoc” and the government should wait for some more time to raise the amount it had proposed to raise during the first quarter. The State government had projected that it will raise ₹52,167 crore open market borrowings during the current fiscal, including around ₹15,000 crore during the first quarter of the current financial year. But the Union Finance Ministry halted the borrowings through the weekly auction of securities and other instruments conducted by the Reserve Bank of India raising several questions pertaining to State’s financial management and the loans obtained in the name of corporations like Telangana State Water Resources Development Corporation.
The Union government reportedly expressed doubts over the capacity of these corporations to repay the loans obtained in their name and held back permission to the State to raise OMBs.
Finance department special chief secretary K. Ramakrishna Rao, who camped in New Delhi for close to a week, explained the financial situation of the State and said investments made in Mission Bhagiratha and other projects are already yielding returns in the form of taxes collected from the municipalities/corporations.
The Centre, after a long wait, had permitted the State to raise ₹4,000 crore OMBs during the auction scheduled by the RBI on June 7 but the Finance officials claimed that they are waiting for permission to raise more amounts.
“The permission given at present is ad hoc in nature. We will wait for permission to raise more amounts to meet the commitments,” a senior Finance official told The Hindu.
The State had been meeting its commitments for schemes like Dalit Bandhu through internal resources since the last two months. But the pressure on finances is set to mount with the onset of monsoon when ₹7,400 crore had to be credited into the accounts of over 60 lakh farmers under the Rythu Bandhu scheme.