Hyderabad: The Telangana state government is on a loan mobilisation spree right at the beginning of the new financial year. It has approached the Reserve Bank of India for the purpose and secured approval to raise Rs 4,000 crore through auction of bonds in the first quarter (April-June).
The state government is under pressure to raise funds for irrigation projects, water grid, 2BHK housing and other schemes. The RBI has lined up auction of bonds in four phases to raise Rs 4,000 crore with Rs 1,000 crore in each phase.
The auction will be conducted on April 18, April 26, May 10 and June 14.
The state government had presented a Rs 1.30 lakh crore budget for the year which mentioned that the state would need to borrow Rs23,467 crore.
The Centre had recently relaxed fiscal responsibility norms for the state by allowing it to secure loans up to 3.5 per cent of the gross state domestic product against 3 per cent earlier. This followed recommendations of the 14th Finance Commission which categorised Telangana as a ‘revenue-surplus state’ along with Gujarat.
This has enabled the TS government to secure an additional Rs 3,500 crore loans this year. The government wants to utilise this opportunity to the maximum and meet 100 per cent targets on loans this year to ensure that there is no dearth of funds for its flagship programmes.
“The finance department has devised a strategy to meet 100 per cent loan targets this year. Auction of bonds through RBI will remain the major source of loan mobilisation. For this reason, we have approached the RBI well in advance and secured approval to raise '4,000 crore through sale of bonds within three months,” said a finance official.
Apart from budgetary provision of Rs 23,467 crore loan, the TS government has also stepped up efforts to secure loans from World Bank, Japan International Coopera-tion Agency, BRICS Bank, China and Rabobank, Netherlands.
Chief Minister K. Chandrasekhar Rao took up a massive redesigning of irrigation projects which will involve spending of over Rs 1 lakh crore in four years for which Rs 25,000 crore is being allotted every year starting this year. With almost half of the plan expenditure in the budget allotted for irrigation projects, the government has became heavily dependent on loans.
