State govt to tap resources, fill Telangana coffers

HYDERABAD: With the Centre not according permission to auction the State government’s securities, an exercise generally carried out by the RBI every Tuesday, Telangana could not raise any loan till date in this financial year. It seems that the chances for according permission are remote. It all started when the Central government wanted all the States to submit the details of their borrowings and the plans to repay them at the beginning of this financial year. 

The Centre can seek the details from the State as per Article 292 of the Constitution. Telangana officials sent some details this month. As a follow-up, the Union Finance Ministry conducted a meeting on Monday. In Monday’s meeting, Special Chief Secretary Finance K Ramakrishna Rao told the Union Finance Ministry officials that the Centre allowed the States to raise Rs 12,000 crore in 2020-21, Rs 15,000 crore in 2021-22 and another Rs 1 lakh crore in 2022-23,  a total of Rs 1.27 lakh crore loans out of the purview of FRBM.

Double standards, says Telangana bureaucrat
“We have raised loans as per the directions given by the Centre and spent the same for capital expenditure,” Ramakrishna Rao said in the meeting. He also pointed out that the Union government was adopting double standards for raising loans.

At this point, the Union Finance Ministry officials referred to the recommendations of the Finance Commission, which suggested that States could decrease their debt burden. However, the State government officials said that the FC suggested constituting an expert group and following their recommendations. However, the Centre did not act on it.

The State government officials said that due to the Covid-19 pandemic they were not collecting money from the public. They, however, told the Finance Ministry officials that municipalities in the State paid Rs 150 crore this year to repay the Mission Bhagiratha loan instalments. After the pandemic, the efforts to repay the loans outside the budget were started, the officials explained. Despite this, the Centre did not give any categorical assurance to the State on allowing it to raise open market borrowings.

Focus on additional revenue
The immediate remedy is to augment the resources within the State. Telangana is planning to raise Rs 4,000 crore to Rs 5,000 per year through Mines and Transport departments. Besides, the government on Monday issued a GO to realise the commercial taxes arrears of Rs 3,000 crore, pending in various stages of litigation and that this amount is not readily recoverable.

For recovering this amount, the government announced the ‘Telangana One Time Settlement Scheme 2022’  on Monday. Under this scheme, 40 per cent to 60 per cent of the tax arrears will be waived off if the balance amount is paid. Applications under OTS will be accepted from May 16 to June 30. For the amounts payable higher than Rs 25 lakh, the instalment facility will be provided without interest up to four equal monthly instalments. Bank interest rates will be applied to those seeking more instalments.