Telangana govt. to raise ₹5,000-crore borrowings on Nov. 25

The State government has opted for raising market borrowings of ₹5,000 crore on Tuesday, continuing its efforts to replace the higher interest loans with lower interest ones.

The government submitted its indent to raise the amount in four tranches with a longer maturity period ranging from 13 years to 28 years as part of the auction of securities to be conducted by the Reserve Bank of India (RBI) on Tuesday. With the fresh borrowings, the government will cross the ₹54,009-crore limit for borrowings set by the Finance Ministry for this fiscal, with four more months to go.

The government, according to the Comptroller and Auditor General of India, raised ₹50,541 crore of the ₹54,009 crore till October end. It has raised borrowings of ₹4,100 crore in November during the auction of securities conducted on November 4, 11 and 18 already. Fresh borrowings will take the amount raised this month alone to ₹9,100 crore.

The State continues to receive lower than estimated revenues during the fiscal resulting in higher dependence on borrowings and financial accommodation instruments provided by the RBI. It had to rely on special drawing facility for all the 31 days of August, raising ₹5,081 crore and ₹2,068 crore through ways and means advances for 27 of the 31 days. The government was on overdraft for 17 days, availing an amount of ₹554 crore during the same month.

The limit on quantum of borrowings assumes significance as the Finance Ministry had not allowed the State to borrow beyond a certain limit, citing financial management issues. Officials are, however, confident that there would not be any objection from the Centre this time around. The borrowing comes at a time when the timeline for crediting of investment support amounting to ₹6,000 an acre into the accounts of over 62 lakh farmers under the Rythu Bharosa scheme is approaching.

“We are doing loan replacement with lower rate of interest,” was how a senior official responded when asked about the purpose for which the amount is being raised. On the limit for borrowing set by the Centre, the official said: “Everything (quantum of borrowings) is under the Fiscal Responsibility and Budget Management Act limits.”