The state government is eagerly waiting for the Centre to enhance its borrowing limit to mobilise funds for welfare schemes and development programmes. (Representational Image/ DC File)
Hyderabad: The state government has decided to raise another Rs 1,187 crore through auction of bonds by the Reserve Bank of India on Tuesday. With this, the total borrowings of the state government through auction of bonds will cross Rs 30,000 crore mark in the current fiscal 2021-22.
The state government has been allowed to borrow Rs 47,500 crore through auction of bonds in 2021-22. It can raise only Rs 17,500 crore in the remaining three months of this fiscal (January-March) by March 30 as per FRMB Act. The state government is eagerly waiting for the Centre to enhance its borrowing limit to mobilise funds for welfare schemes and development programmes.
The state government has sought an increase in FRBM limit from 3.5 per cent of GSDP to 5 per cent. Finance minister T. Harish Rao made a request in this regard to union finance minister Nirmala Sitharaman in July last. However, the Centre's nod is awaited.
If the Centre approves, the state government can borrow an additional Rs 12,000 crore. As the Covid pandemic since March 2020 adversely affected the state government's finances, the government is depending heavily on loans to fund welfare schemes and development programmes, according to official sources.
The government's expenditure in this fiscal has increased due to Dalit Bandhu, Rythu Bandhu, Rythu Bima, subsidised rice, free power to various sections and enhancement of salaries and pensions for employees and pensioners. Although the state government is releasing funds to welfare schemes and development programmes in a phased manner, it owes dues to welfare schemes and bills to contractors, for which it needs to mobilise additional loans.