The subject of debt and external borrowing secured by the State government since the formation of the new State witnessed heated debate in the Legislative Assembly on Tuesday even as Finance Minister Eatala Rajender asserted that the government was opting for borrowings to fulfil the aspirations of the people.
The Finance Minister said the State obtained ₹22,485.06 crore loans from Centre and other financial institutions and the total debt of the State was pegged at ₹1.35 lakh crore. The government was remitting ₹8,609.19 crore towards debt servicing annually. The government was investing in fixed assets like irrigation projects and the loan portfolio was well under control due to the prudent financial measures initiated by the State. “The government has obtained loans for ensuring accelerated development in terms of necessary infrastructure. This will in turn result in all round progress of all sections,” he said.
Mounting debt
The issue which figured during the Question Hour saw the opposition Congress and the BJP cautioning the Government against “indiscriminate borrowings”. Congress member T. Jeevan Reddy expressed concern over the mounting debts which rose from ₹70,000 crore during the formation of the State to ₹1.35 lakh crore in the last three-and-a-half years pushing the State into a ‘debt trap’.
This was in addition to the off budget loans obtained in the name of corporations and the loans obtained by the government were around ₹2 lakh crore taking the per capita debt to close to ₹40,000. “Every newborn will carry a debt of ₹40,000 on his or her head as the State government failed to make investments in manufacturing sector,” Mr. Jeevan Reddy said adding the State was ranked number one in terms of obtaining loans as was evident from the significant 71 % rise in debt against the national average of 33 %.
Corporate debt
Opposition leader K. Jana Reddy charged the government with indulging in jugglery of figures for projecting the State as revenue surplus State. The existing loans along with the State guarantees given to the corporation would pose a huge burden in the coming days.
Mr. Jana Reddy said the quantum of loans obtained by the State did not contain information about the burden on account of schemes like UDAY which did not come under the FRBM norms.
BJP member G. Kishan Reddy demanded that the government make public the details of loans obtained in the name of corporations. “Corporations are being created for the sake of loans and these are in turn providing political employment to TRS functionaries,” he said.
Cleared by Centre
The Finance Minister, however, responded claiming that the State could secure loans only after it satisfied the Centre that its finances were within the ambit of the FRBM Act.
“The Centre will allow States to raise loans subject to fulfilment of certain conditions. Telangana could get these loans as it has fulfilled all the norms stipulated by the Centre,” he said adding that the Opposition’s claims on pushing the State into debt trap were false.
