Hyderabad: The Centre on Wednesday fulfilled the Telangana state government’s wish of borrowing more money by increasing its FRBM limit to 3.50 per cent.
This will enable the TS government to borrow an additional Rs 3,575 crore in this fiscal (2017-18).
As per FRBM (Fiscal Responsibility and Budget Management) norms, states will be allowed to borrow up to three per cent of their GSDP.
However, for revenue-surplus states, the Centre can raise the borrowing limit by an additional 0.50 per cent. As TS has been a revenue-surplus state since its formation in 2014, the government requested the Centre to increase the FRBM limit to 3.50 per cent to mobilise additional loans to fund its various welfare and development programmes, which the Centre has approved.
Last year, too, the TS government had made a similar request, but the Centre had agreed to increase the FRBM limit to 3.25 per cent only.
This year, the state government was more persistent.
Chief Minister K. Chandrasekhar Rao took up the issue with Prime Minister Narendra Modi and Union finance minister Arun Jaitley several times during his trips to Delhi.
The flexibility to states to raise an additional 0.5 per cent loans if they are revenue-surplus will be given till 2019-20 after reviewing the fiscal policy of states every year.
The Centre asked state government to preferably use additional loans raised towards meeting the state’s share in centrally sponsored schemes.
