The State Government has decided to raise ₹13,000 crore through open market borrowings during the January-March last quarter of the current financial year.
Accordingly, the Government proposed to raise ₹4,000 crore in January, ₹3,000 crore in February and another ₹6,000 crore in March. The Government raised ₹42,551 crore through OMBs in the first nine months of the current fiscal and the proposed market borrowings would take the total for the financial year to around ₹55,500 crore.
The State Government has opted for raising the loans in spite of the restrictions imposed by the Union Finance Ministry on the borrowings. The Union Ministry, in response to a query, clarified that no restrictions had been imposed on the State and it would adopt a common yardstick for all States while granting them permission under Article 293(3) of the Constitution for borrowing from the open market and other sources.
Accordingly, the borrowing limit for the State was arrived at ₹57,813 crore, but it had been reduced to ₹42,225 crore after adjusting the over borrowing of ₹15,588 crore of the previous financial years. The State had opted for negotiated loans of ₹1,500 crore and an estimated borrowing from the public account of ₹4,107 crore leaving the State an option of raising ₹36,617 crore open market borrowings.
However, the State had far exceeded this limit by December end. The provisional data submitted to the Comptroller and Auditor General of India showed that the State borrowed ₹38,151 crore till October end as against the ₹38,234 crore projected for the full year in the budget estimates. The State raised additional borrowing of ₹4,400 crore in November and December taking the total borrowings to ₹42,551 crore.
Given this background, doubts are being raised on whether the Union Finance Ministry would allow the State to borrow the proposed amount much higher than the limit fixed by it for the current fiscal. Finance department officials are however justifying the State’s indent filed with the RBI claiming that it was proposed to raise ₹57,813 crore through borrowings in the current year’s budget and the State could not lose out on its right because of the restrictions imposed by the Centre.
