Telangana Govt’s interest payment exceeding budgetary estimates every passing year
The Hindu
Telangana Government struggles with rising interest payments on loans, seeking debt restructuring to ease financial burden.
Telangana Government is apparently saddled with the burden of interest payment due to the huge loans obtained from the financial institutions in the past 10 years.
The interest payments over the past few years are on the rise and surpassing the quantum projected in the budget estimates of the respective financial years. For instance, during the current fiscal, the State has incurred expenditure of Rs. 13,187 crore on account of interest payments by the end of September - second quarter. This is 74.38 per cent of the Rs. 17,729 crore interest payments projected in the budget estimates for the entire year.
With two more quarters still remaining, the State is likely to end up paying interests much higher than the amount projected in the budget estimates.
This is not an isolated case, the State Government remitted Rs. 23,337 crore interest in the previous financial year 2023-24, 104% of the Rs. 22,407 crore of the budget estimates.
The same was the case with the interest payment in 2022-23 when the State ended up paying Rs. 20,952 crore, 110% of the Rs. 18,911 crore projected for the fiscal. And, in 2021-22, the State had to pay Rs. 18,688 crore which is 105% of the projected Rs. 17,854 crore in the budget estimates.
Chief Minister A. Revanth Reddy has been expressing concern over the legacy of high interest loans handed over by the previous Government. The Congress Government had estimated that the State is saddled with borrowings of Rs. 6.85 lakh crore in the White Paper on State finances tabled in the assembly.
The Chief Minister accordingly made strong pitch with the XVI Finance Commission to allow Telangana Government to restructure its debt so that it could mitigate the burden of interest payment. Irrigation Minister N. Uttam Kumar Reddy visited the national capital more than once seeking the Union Finance Ministry’s consent for rescheduling of loans so that the State could withstand the pressure on its finances.
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