Hyderabad: The state government is setting up corporations to raise loans to fund its various flagship programmes.
Several corporations are being set up to beat the borrowing limits prescribed under the Fiscal Responsibility and Budgetary Management (FRBM) Act and due to this, the debt burden of the state government is increasing manifold year after year.
The FRBM Act allows states to borrow up to three per cent of GSDP only. However, Telangana state was allowed to borrow up to 3.5 per cent because it is a revenue-surplus state.
Despite availing of this maximum debt limit of 3.5 per cent, the state government is attempting to secure additional loans through the backdoor every year by setting up new corporations and giving bank guarantees to them to raise thousands of crores of rupees.
After the bifurcation of erstwhile Andhra Pradesh in June 2014, the outstanding loans of the undivided state were divided between TS and AP. TS inherited a debt burden of '70,000 crore.
The TRS government in its 44-month rule has raised loans of '1.52 lakh crore.
Of this, '87,100 crore was raised as per the provisions of the FRBM Act (3.5 per cent of GSDP). But another '65,000 crore was obtained through setting up corporations.
The total debt burden of the state government has already crossed '2.22 lakh crore.
Servicing these loans has become difficult for the state government. The government needs to pay '11,138 crore as interest on loans of '87,100 crore that it has raised as per the FRBM Act. And then there is the interest on the '65,000 crore it has raised through the corporations it has created.
The government raised '24,000 crore through Kaleshwaram Corporation by guaranteeing the loan.
It raised '20,000 crore for Mission Bhagiratha through Telangana Water Grid Corporation. It has lined up plans to raise another '10,000 crore this year to complete the project by June 2018. Interestingly, Mission Bhagiratha costs '42,000 crore and the entire amount is raised through loans, with the government not sanctioning anything in any annual budget so far.
It raised '10,000 crore through the Housing Corporation for 2BKH housing scheme for the poor. It has lined up Devadula Corporation to raise '20,000 crore loan for the Devadula, Sitarama, and Tupakulagudem irrigation projects.
It has devised plans to raise '20,000 crore through Palamur-Ranga Reddy Project Corporation for construction of the lift irrigation project.
