Telangana to raise ₹3,000 crore OMB through RBI

Officials said the borrowing has Centre’s approval 

The State Government received the much-needed relief with the Union Finance Ministry giving its nod for raising open market borrowings to the tune of ₹3,000 crore. This is the second installment of loan offtake by the government this quarter ending this month, the first having been raised on June 7 to the tune of ₹4,000 crore.

The State will participate in the auction of securities slated for next Tuesday following the approval granted by the Central Government. The State had initially released a notification for the latest borrowing to raise only ₹1,000 crore through auction of securities, but the amount had now been increased to ₹3,000 crore.

“We will be raising ₹3,000 crore. At present that is the plan,” a senior Finance department official said.

Asked whether the issue with the Union Finance Ministry has been resolved amicably, the official said: “We have the approval. As of now we are Okay,” he said when asked whether the State would be in a position to meet the commitments under Rythu Bandhu. When asked whether the issues with the Union Ministry had been resolved, he averred that the RBI would not move without the approval of the Union Ministry, but did not elaborate on it further.

The development assumes significance as Chief Minister K. Chandrasekhar Rao has announced the other day that the government would start crediting the amounts due under the flagship Rythu Bandhu, farmers’ investment support scheme, from June 28. The announcement however raised questions on how the government planned to mobilise the huge amount to the tune of ₹7,400 crore would be paid as the first installment of Rythu Bandhu at a time when the State’s revenue receipts continued to hover around ₹11,000 crore.

Coupled with this were the restrictions imposed by the Union Finance Ministry over OMBs since the start of the current financial year raising queries about the management of finances and over-reliance on market borrowings. In this background, Finance department special chief secretary K. Ramakrishna Rao flew to New Delhi and has been holding discussions with officials at different levels and the efforts apparently yielded results going by the permission to raise OMBs.