Hyderabad: The Centre has taken a serious view of off-Budget expenditure and borrowing by state governments, which “undermines the power of fiscal rules”.
The Centre said by their very nature off-Budget items are difficult to measure since the instruments may vary by state and are difficult to quantify. The data is not centrally compiled and accounted for, it said.
Many states including Telangana state make off-Budget borrowings to avoid the ceiling imposed by the Fiscal Responsibility and Budget Management (FRBM) rules.
The governments do not borrow directly, it is done through corporations with the states standing guarantee.
The government has set up the TS Drinking Water Supply Corporation to take up Mission Bhagiratha. Through the Budget this year, the government has borrowed about Rs 20,000 crore. In addition to this, the government has proposed off-budget borrowings of Rs 43,000 crore.
It stands at Rs 15,000 crore for the Kaleswaram irrigation project and Rs 10,000 crore for the 2BHK scheme.
An official said that said after completion of these projects, the state will have to repay about Rs 20,000 crore per year as interest and principal.
The government’s own revenues stand at Rs 50,000 crore of which Rs 30,000 crore goes to salaries and pensions. The repayments of Rs 20,000 crore will account for the rest of the earnings....