Centre reduces Telangana’s borrowing limit by Rs 19,000 crore

Hyderabad, July 6: All-out war declared by Telangana Chief Minister K. Chandrashekar Rao against the Modi-led Central government is impacting state finances, according to political analysts. Telangana can only raise the Fiscal Responsibility and Budget Management (FRBM) loan up to Rs 34,970 crore as against Rs 53,970 crore. 
 
The Finance Ministry reduced borrowing limit of the Telangana government from the open market by Rs 19,000 crore. Reduction in borrowing attributed to inclusion of loans taken by various corporations for the financial years 2020-21 and 2021-22 in the purview of FRBM. 
 
The Telangana government raised serious objection for including corporation loans of previous years in the FRBM. The KCR government demanded that the Centre should consider only loans borrowed by corporations for the financial year 2022-23. Now, Finance Minister T. Harish Rao is exploring various options for generating additional finances to meet needs of social welfare schemes and ongoing developmental works.