With Center’s Apathy, AP To Go For More Loans

With Modi government being totally insensitive to the Cash-Strapped state, Andhra Pradesh government had started looking for other options which includes going for more loans. The government is planning to amend the Fiscal Responsibility and Budget Management (FRBM) act in the next Assembly session.

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According to present FRBM act that the borrowing limit is 3% of the Gross State Domestic Product (GSDP). Now, the state government wants to increase the borrowing limit from 3% to 3.5%. This will ensure that the state can go for 3000 Crore of additional loans. At present the borrowing limit of state is Rs 18,000 crore per year.

After the amendment of FRBM act the state government’s borrowing limit will be increased to about Rs 21000 crore per year. Once the Assembly passes the amendment, Center will have to approve it. Interestingly, the center is also trying to increase its borrowing limit. It has appointed a committee to study on the issue.