Hyderabad: The TS government is shocked at the way the Centre is trying to give the state with one hand and take away with the other as far as borrowings are concerned.
After struggling for two years, the state government recently secured Centre’s approval to raise its borrowing limit from 3 per cent to 3.5 per cent of GSDP, being a revenue-surplus state. This will enable the state government to secure an additional Rs 3,000 crore loans from various financial institutions.
Even as the government was upbeat over the borrowing limit being enhanced, it received a shocker in the form of the Centre imposing a cut on the borrowing limit by nearly Rs 1,500 crore on the ground that the TS wrongly calculated the borrowing limit based on GSDP growth rate.
The government had targeted to borrow over Rs 23,467 crore in budget this year (2016-17) as per the 3.5 per cent of GSDP norm. Worse, the Centre is yet to issue a notification enhancing TS borrowing limit to 3.5 per cent, though the Union Cabinet approved it in April.
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The government is in dire need of loans to fund its irrigation projects, infrastructure projects, Mission Bhagiratha, 2BHK housing scheme etc. It had hoped to secure targeted loans of Rs 23,000 crore this year, but is now likely fall short of the target by Rs 1,500 crore due to the fresh cut imposed by the Centre.
“The Centre pointed out that the GSDP growth rate calculation was wrongly done and was not in accordance with the 14th Finance Commission recommendations. We raised objections over this. We have followed the norms in determining borrowing limit over the years,” said a senior official of finance department.
The Centre asked the state to calculate the GSDP growth rate based on the average GSDP growth rate of previous two years and determine the borrowing limit for the next two years.
