Hyderabad: Finance Minister Etela Rajender reiterated that debts were inevitable for development of the State and having loans does not downgrade the State’s fiscal position. He said the government was obtaining loans only for taking up development projects like Mission Bhagiratha in Telangana State which was otherwise ignored in undivided Andhra Pradesh.
Responding to a question on loans obtained by the State government from banks and other financial institutions in the Assembly on Tuesday, the Finance Minister admitted that the State debts have increased from about Rs 69,000 in June 2014 after the State formation to Rs 1.35 lakh crore during the current fiscal. “Yes, we have obtained loans but it was meant for development activities like Mission Bhagiratha which alone requires Rs 40,000 crore,” he said.
Rajender said the government obtained loan under UDAY (Ujwal DISCOM Assurance Yojna) scheme of the Central government to strengthen our power distribution companies which ran into financial losses due to inefficiency of the previous governments. He informed the Assembly that interest burden on the State exchequer would be Rs 8,609 crore. “As previous governments ignored development in Telangana region, people suffered due to drought, suicides and hunger deaths. But priorities of the State government have changed and to ensure speedy development of the State, it was necessary to pool money from various sources including loans,” he added.
The Finance Minister reiterated that the State government cannot obtain loans as per its whims and wishes but has to fulfill FRBM (Fiscal Responsibility and Budget Management) conditions as well as obtain permission from the Central government to get loans. “Telangana State is one of top three States which have achieved 3.5 per cent of FRBM limit. Our revenue receipts are higher than expenditures. Further, we have been a revenue surplus State for the past three years. All these factors make us eligible to obtain huge loans for the State development,” he explained.
Earlier, Congress and BJP legislators expressed doubts over financial condition of Telangana State treasury as the State government obtained double the loans obtained over 70 years, within a short span of three-and-half years. Congress floor leader K Jana Reddy expressed fears that sudden increase in debts would lead to huge financial burden on the exchequer. Senior Congress MLA T Jeevan Reddy pointed out that the State government debt translates into about Rs 41,000 loan per person in the State. BJP floor leader G Kishan Reddy stated that beside the State government, various government organisations also obtained loans in a large scale.