Telangana’s total liabilities moving closer to ₹4 lakh crore

Telangana's debt burden is mounting, with total liabilities nearing ₹4 lakh crore. The Union Finance Ministry has restricted the State's gross borrowing to ₹42,225 crore for the current year. Revenue collection has been low, so the State has had to depend on auction of lands and liquor licences to raise funds. Welfare schemes and crop loan waiver have added to the burden.

Telangana’s debt burden is continuing to mount with total liabilities moving closer to ₹4 lakh crore.

According to the Comptroller and Auditor General of India’s audited figures for 2021-22, the State’s total liabilities were to the tune of ₹3.21 lakh crore, amounting to 28% of the GSDP. This includes ₹6,949 crore which was passed on as back-to-back loans by the Central Government in lieu of the shortfall in the GST compensation.

The State could raise ₹32,119 crore in 2022-23 against the ₹52,167 crore projected in the budgetary estimates for the year, thanks to the restrictions imposed by the Union Finance Ministry on the ground that the State had “over borrowed” during the preceding fiscal years. The Union Ministry has fixed the gross borrowing ceiling of Telangana at ₹42,225 crore during the current year, of which the State had opted for negotiated loans of ₹1,500 crore and borrowing from public account to the tune of ₹4,107 crore, leaving space for raising ₹36,613 crore from the open market.

During the current fiscal, the State had raised open market borrowings of ₹26,500 crore through the auction of securities conducted by the Reserve Bank of India before the end of the first half thus leaving scope for raising just around ₹10,000 crore in the next seven months. The borrowings were mainly on account of the spree of welfare schemes announced for different sections and the commitments the Government had in the form of Rythu Bandhu, Dalit Bandhu and ₹1 lakh financial assistance as grant to sections like BC artisans and Muslims.

Added to these is the promise of completing crop loan waiver up to ₹1 lakh to eligible farmers which would entail around ₹19,000 crore.

On the revenue side, the State could achieve tax revenue of ₹42,712 crore till the end of July, just 28% of the targeted ₹1.52 lakh crore for the current fiscal. With revenue not meting expectations and restrictions imposed by the Centre on the borrowings, the State had to depend on auction of lands and advance issuance of licences for liquor outlets which fetched some revenue that helped the State in tiding over the burden on finances due to schemes like crop loan waiver.