Hyderabad: The Reserve Bank of India on Friday permitted Telangana state and Andhra Pradesh to raise `6,000 crore and `8,000 crore respectively through auction of bonds for the second quarter of this fiscal (July-September 2021-22). The two governments have already raised over `12,000 crore each in the first quarter.
The Covid-induced financial crisis is forcing the states to depend heavily on loans to mobilise funds for welfare schemes and development programmes.
Telangana state has been permitted to borrow `1,000 crore in July, `3,000 crore in August and `2,000 crore in September. AP can raise `3,000 crore in July, `4,000 crore in August and `1,000 crore in September.
The TS raised `13,000 crore in the first quarter of this fiscal (April-June). The state government had proposed to raise `47,500 crore through auction of bonds in Budget 2021-22.
In 2020-21, the budgeted borrowing was `33,191.26 crore, but the TS government logged `45,638.79 crore after the Centre raised the FRBM (Fiscal Responsibility and Budget Management Act) limit from 3 per cent to 5 per cent of GSDP to help states tide over the Covid financial crisis.
Against this backdrop, finance minister T. Harish Rao made a request to the Centre during the GST Council meeting held by union finance minister Nirmala Sitharaman in June to increase FRBM limit to 5 per cent again this year as the Covid second wave adversely impacted revenue earnings of states.
If permitted, the state government could mobilise an additional `12,000 crore over the budgeted borrowing limit of `47,500 crore this fiscal.