Home » RBI nod to TS, AP to raise funds via auction of bonds

RBI nod to TS, AP to raise funds via auction of bonds

by etodayonline
The two governments have already raised over `12,000 crore each in the first quarter
The Reserve Bank of India permitted Telangana state and Andhra Pradesh to raise `6,000 crore and `8,000 crore respectively. (AFP)

 The Reserve Bank of India permitted Telangana state and Andhra Pradesh to raise `6,000 crore and `8,000 crore respectively. (AFP)

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.

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