Telangana’s public debt stands at Rs 2.3L crore

Hyderabad: Telangana’s public debt stands at Rs. 2,37,747 crore as of November 30, 2021, of which Rs. 2,34,912 crore is internal debt and Rs. 2,835 crore is external debt, said Minister of State Finance of the Union, Pankaj Chaudhary, by answering a question asked by the Member of Parliament for Malkajgiri Anumula Revanth Reddy.

Public debt refers to the total borrowing of a government to meet its development budget during a given period. The government borrows either inside the country, which is called the internal government debt, or outside the country, which is called the external debt.

No central grant to TS from 2017-18 to 2021-22

One of the main sources of internal borrowing for a state government is the Reserve Bank of India.

The minister said that the RBI did not make any loans to Telangana, but was supporting the state government in correcting temporary asymmetries through financial accommodations in the form of a special drawing facility (SDF ), an advance on ways and means (WMA) and an overdraft.

The SDF is extended by the RBI against collateral such as government securities held by the state government. It depends on the investments of the relevant state government in the central government.

WMA is the temporary loan facility provided by RBI. This is used when the government needs immediate cash. This loan facility is for a period of 90 days. If this limit is exceeded, it is treated as overdraft. Overdrafts are not authorized beyond 10 consecutive working days.

Additional central assistance (loans or grants) is provided by the Center for the implementation of externally assisted projects (EAP) funded by international agencies such as the Government of Japan (JICA), Asian Development Bank (ADB), the World Bank and the International Bank. for Reconstruction and Development (BIRD).

According to data on additional central aid to Telangana, in 2016-2017, the Center provided a grant of Rs. 30.72 crore to Telangana. But since then, the state has received no subsidy for five consecutive years.

Loans by the Center for various projects in the state have also fallen from Rs. 956 crore in 2016-17 to Rs. 207 crore in 2019-20 and to zero in 2021-22.

Repayment of loan and interest

In addition to the RBI, the Telangana government has borrowed mainly from three foreign agencies – JICA, IBRD, and the International Development Association (IDA). As of December 12, 2021, the state government has repaid loans amounting to Rs. 67.66 crore for the year 2021-22 – Rs. 29.45 crore to JICA, Rs. 32.06 crore to IBRD and Rs. 6.15 crore to IDA.

Interest of Rs. 11.85 crore was also paid by the state government in 2021-2022, of which Rs. 5.96 crore was paid to JICA, Rs. 4.56 crore to IBRD, and Rs. 1.33 crore at IDA.

What is left to pay?

JICA is Telangana’s main lender for financing infrastructure projects, followed by IBRD and IDA. Minister Pankaj Chaudhary revealed that the state owes a total of Rs. 154.84 crore of the principal amount and Rs. 24.68 crore of interest to be paid in 2021-2022 to JICA, IBRD and the IDA. Of this amount, the state owes a principal amount of Rs. 71.37 crore and interest of Rs. 14.37 crore to JICA, Rs. 63.62 crore principal amount and Rs. 7.92 crore interest for IBRD, and Rs. 19.85 crore and Rs. 2.39 crore at IDA.

(In crores)

Also, it is estimated that for the year 2022-2023, the government is required to pay Rs. 153.57 crore in principal amount and Rs. 21.81 crore in interest, and for 2023-24, it is required to pay Rs. . 153.62 crore principal amount and Rs. 20.72 crore interest for the three foreign agencies.

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