Senior TDP leader Yanamala Ramakrishnudu has asked Finance Minister Buggana Rajendranath Reddy to clarify whether the Centre has increased the FRMB limit to 5% without any pre-conditions.
“The State government’s borrowings and loans are in violation of the FRMB limits,” Mr. Ramakrishnudu said in a statement on Friday.
The Finance minister was misleading the people by asserting that there was no need for “government guarantee” for loans amounting to ₹25,000 crore availed by the government through the AP State Development Corporation Ltd. (APSDCL).
ADVERTISEMENT
If it were true, why did the government enter into escrow agreements, the former Finance Minister asked.
“The State government should give guarantee for all the loans taken by the corporations. These guarantees should not cross 90% of the State’s total revenue,” he said.
“It is a fact that the burden of loans given to the corporations will fall on the government naturally,” he added.
ADVERTISEMENT
Also, Under Article 293(3), the State should take the approval of the Union government for all budgetary borrowings. It was a serious financial lapse on the part of the State government not to inform the Centre about ₹77,700 crore loans taken in 2019-20 and ₹91,000 crore loans in 2020-21, the TDP leader said.
As per the norms, the State’s overall loans should not cross 3% of the FRBM limit, he asserted.