The State government has decided to raise open market borrowings of ₹2,500 crore through the auction of securities conducted by the Reserve Bank of India (RBI) on Tuesday.
The government, according to the RBI website, has opted for ₹1,000-crore loan with a tenure of 16 years and another ₹1,500 crore which has tenure of 20 years. The latest tranche of market borrowings will take the total market borrowings during the current year to around ₹24,000 crore, including ₹5,000 crore each raised during the months of July and August.
The highest amount of borrowing this financial year was in June when the government raised ₹6,000 crore on June 6 (₹1,500 crore), June 13 (₹2,500 crore) and June 27 (₹2,000 crore). The current market borrowings are said to be raised for fulfilling the commitment made for crop loan waiver because of which the government is expected to incur an expenditure of around ₹20,000 crore. It comes in the light of restrictions imposed by the Union Finance Ministry which fixed the gross borrowing limit of Telangana for the current fiscal at ₹42,225.17 crore. Of this quantum, the government had opted for negotiated loans of ₹1,500 crore and an estimated borrowing from public account to the tune of ₹4,107.82 crore. This left the State with scope for raising ₹36,617.35 crore from open market.
With the State government raising around ₹24,000 crore a month before the completion of the second half of the fiscal, it would be left with an option of raising around ₹12,000 crore for the next seven months. The tight fiscal situation the State had been facing could be seen from the fact that it was forced to depend on the financial accommodation facilities like special drawing facility, ways and means advances and overdraft provided by the RBI.
The State had used the special drawing facility for all the 30 days in June raising ₹832.63 crore and depended on ways and means advances to the tune of ₹1,254.36 crore for 26 days in June this year, according to the RBI bulletin.
