Hyderabad: The state government is eligible to borrow additional money from the markets in 2018-19, while the AP government is not. The TS government has fulfilled the terms set by the 14th Finance Commission to be eligible for market borrowing of an additional Rs 2,052 crore.
This was stated by Union minister for state for finance Pon Radhakrishnan in the Rajya Sabha on Wednesday in reply to a question by YSRC MP V. Vijaya Sai Reddy.
The 14th Finance Commission had set a revenue deficit limit of 3 per cent of the Gross State Domestic Product (GSDP) to both the states. It had recommended that the ratio of interest rate to GSDP cannot be more than 25 per cent. If the interest payments are less than or equal to 10 per cent of revenue receipts in the preceding year the condition may be relaxed.
Having met the condition, the Telangana state is eligible to borrow an additional 0.25 per cent of the GSDP, which would equal Rs 2,052 crore. This would be on top of the 3 per cent of general limit on borrowings.
Mr Radhakrishnan said the AP government had requested an increase in the Fiscal Responsibility and Budget Management (FRBM) limit from 3 per cent to 3.5 per cent It was not possible as the state government had not fulfilled the conditions of the 14th Finance Commission.
He said Rs 15.81 crore has been released to AP to pay interest on loans taken through the external aided projects as a part of special finance package.
In reply to another question, minister of state for home Hansraj Gangaram told Mr Galla Jayadev of the TD said '350 crore released to AP under the backward districts development has been withdrawn due to a defect in procedures.
