The State Government is unlikely to raise the targetted open market borrowings during the current financial year as the impasse over the Central Government’s approval, a mandatory requirement under Article 293 of the Constitution, is continuing.
The State Government has raised OMBs to the tune of ₹10,000 crore in three tranches this year including ₹3,000 crore on Tuesday. The Government had proposed to raise ₹53,750 crore through market borrowings for the current fiscal, but the figure had been pruned to ₹52,165 crore in the provisional data submitted to the Comptroller and Auditor General of India.
The quantum of OMBs has further been reduced by close to ₹19,000 crore following the objections raised by the Union Finance Ministry on the financial management and huge off budget borrowings raised in the name of State run corporations, sources said. Following a series of discussions, the Central Government is understood to have given in principle consent to allow OMBs of around Rs. 33,000 crore for the current year.
Finance department officials said the Centre had allowed OMBs of ₹7,000 crore for the first quarter on ad hoc basis, but has given its nod to the State in the Reserve Bank of India auctions on a regular basis from the second quarter subject to adhering to the limits prescribed on the borrowings. Though the Centre had given its in principle nod for raising OMBs under Fiscal Responsibility and Budget Management norms, stalemate over off budget borrowings in the name of corporations was, however, continuing.
The government had therefore focussed on alternatives including streamlining and strengthening its own revenue sources rather than depending on the Central Government for its approval. Chief Minister K. Chandrasekhar Rao is expected to convene a meeting of senior officials on the modalities that should be adopted to augment resources.
The government had intensified efforts to raise finances required for the implementation of flagship schemes as well as several welfare and development works underway. In line with this, steps had been initiated for sale of Rajiv Swagruha flats, lands under the possession of HMDA, enhancement of life tax on vehicles, liquor prices and other measures.
At the same time, Finance Minister T. Harish Rao highlighted the issue pertaining to diversion of commercial taxes in the recent GST Council meeting held at Chandigarh. He expressed concern that huge amounts were being diverted as customer addresses in the records of certain tax payers were still showing Andhra Pradesh in spite of the fact that they were located in Telangana.
The GST Council had directed the officials concerned to rectify the records and submit a report next month. The Government had accordingly focussed on recovering taxes diverted to the neighbouring State in a retrospective manner as it would help augment its resources.
