Telangana has been able to equally distribute its finances to every sector. Finance minister T. Harish Rao said the Assembly that the state government will not agree to the conditions of the Centre for improving the FRMB limits by the state government to acquire loans. He escorted the Session after he was revealed as Covid negative. He was responding to the discussion on the Bill amending the Telangana Fiscal Responsibility and Budget Management (FRBM) Act. Giving reasons for improving the FRBM Act, he told the Centre had allowed additional borrowing of ₹ 1,435 crores during the preceding fiscal following the shortfall in the devolution of share of Central taxes as a one-time special distribution.
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He stated in view of an unusual unfavourable result of COVID-19 on State revenues and there is a need to raise additional resources to meet the unforeseen expenditure. The Centre had allowed additional borrowing up to 2 % of the GSDP over the above the normal limit of 3% subject to carrying amendments to the State FRBM Act. He said that amendments to the Act also meant to improve the quantum of guarantees it could provide to State-owned corporations from 90% to 200%.
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He made it clear that “the state government, however, is not willing to accept the conditionalities imposed by the Centre even if it has an impact on its borrowings.” The finance minister denied the concern expressed by the Congress Legislature Party leader Mallu Bhatti Vikramarka at the net borrowings of the state government charged him with trying to mislead people with his calculations. The CLP leader said the State’s debt burden had risen to Rs 2.38 lakh crore in the past six years and it was spending ₹ 23,841 crores on debt servicing every year.
