A month in to new year, Telangana begins loans!

We are not even a month in to the new financial year but Telangana government already started going for loans. The state government approached RBI and secured approval to raise Rs 4,000 crore through auction of bonds in the first quarter. This is to raise funds for irrigation projects, water grid, 2BHK housing and other schemes.

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The auction of bonds will take place in four phase with Rs 1,000 crore in each phase. The state government recently tabled a Rs 1.30 lakh crore budget for the year and it needs to borrow Rs 23,467 crore. Recently the Central government relaxed FRBM limits for the state to secure loans up to 3.5 per cent of the gross state domestic product against 3 per cent earlier.

This is because the 14th Finance Commission categorized Telangana as a ‘revenue-surplus state’ along with Gujarat. With this move, Telangana would be able to secure an additional Rs 3,500 crore loans this year. The finance department is planning to meet 100 percent loan targets this year.