Telangana govt to Centre: If Punjab and Haryana can borrow, so can we

HYDERABAD: After missing three market borrowing dates, the Telangana government has written to the Union finance ministry requesting permission to borrow during Reserve Bank of India (RBI) auctions.
The ministry had decided recently that off-budget loans too would come under the Financial Responsibility Budget Management (FRBM) Act and refused permission to Telangana to be part of the auctions.
Telangana finance department has written to the Union finance ministry officials pointing out that states like Haryana, Punjab, and West Bengal have been granted permission for limited market borrowings. So, the Centre should consider giving similar permission to Telangana immediately, the finance department said.

The state has been unable to issue development bonds even six weeks into the new fiscal year (2022-23). According to sources, the state government has asked the Centre to allow market borrowings by the end of this month. Going by the fixed loan calendar, Rs 3000 crore is to be raised on May 31.
Meanwhile, given the current uncertainty surrounding market borrowing permissions, alternative options are being explored.
It is estimated that the state government can mobilise approximately Rs 1,700 crore through various ways and means. Another Rs 2,000 crore can be borrowed from banks through overdraft facilities.
The Centre had halted market borrowings of several states objecting to off-budget borrowings services by state governments themselves. According to sources, Kerala was granted ad hoc permission to raise a loan of Rs 5,000 crore. Only Punjab, Andhra Pradesh, Haryana, West Bengal, Maharashtra, and Rajasthan were granted permission for market borrowings this fiscal year.
Lending institutions have been informed that they can grant loans after RBI clears the facility to the state-owned corporations The state government is in a rush to secure market borrowings because Rythu Bandhu disbursal is set to begin next month.