Forget about the surplus budget, Telangana, the newest state of the country’s financial position is slowly moving in to red. The crop loan waiver, purchasing power at a higher cost, Hyderabad not being a cash cow as it was before the bifurcation are said to be the reasons for this situations. Adding to that the government did not yet got the budget passes and are only steadying the ship on a day-to-day basis by seeking special permission from the Governor to utilise the funds for emergency needs till the Budget gets approval.
The Telangana government has signed contracts of Rs 80,000 crore since the new state got in to effect on June 2, mainly in sectors such as irrigation, roads and buildings, panchayat raj, rural water supply and municipal administration. There are so far arrears of 2,290 crore bills but Telangana government is not able to pay them. The finance department are sitting on the bills asking the departments only to send the priority ones.
Recently the government has auctioned bonds and raised Rs 800 crore at an interest rate of 8.8 per cent in the open market. However in less than a week, 120 Crore of it was spent for purchasing power at a higher rate of Rs 8.50 per unit in the open market in the wake of severe power shortage in the state. Experts say that this situation will not get any better until the government convenes the Assembly and gets the budget approved. It is known that the Chief Minister has been delaying the budget for the past couple of months citing a budget of his ‘mark’ is being prepared. The CM is expected to hold a review meeting with the finance ministry and other officials on Monday to decide up on the remedies to overcome the crisis.
