Tamil Nadu

Tamil Nadu’s borrowing touch ₹82,000 crore in FY2020-21

Tamil Nadu’s market borrowings has touched ₹82,000 crore in FY2020-21 (from April 7-March 21), up 37% from ₹59,990 crore in the comparable period last year.

Tamil Nadu has been the biggest borrower among states so far. On Tuesday, Tamil Nadu raised ₹2,500 crore through re-issue of a 10-year bond also called as State Development Loans. The bond had a yield of 7.16%.

States and Union Territories have been resorting to higher market borrowings this year, amid the shortfall in finances due to impact on revenue due to the disruption from COVID-19 pandemic on the one hand and increase in expenditure on the other hand.

Tamil Nadu, Maharashtra, Uttar Pradesh, Karnataka, Rajasthan and Andhra Pradesh have been the top six borrowing states, accounting for 53% of the total borrowings so far in 2020-21. There has been a notable year-on-year increase in the market borrowings of large states such as Madhya Pradesh (112%), Rajasthan (57%), Maharashtra (54%), Karnataka (43%), Tamil Nadu (37%), Telangana (36%) and Andhra Pradesh (28%), according to Care Ratings.

Replying to the general discussion on the interim budget for 2021-22 in the recently concluded assembly session, Deputy Chief Minister O Panneerselvam (who handles the Finance portfolio) had pointed out that the State is facing shortfall to the tune of ₹38,674.52 crore in its revenue receipts for 2020-21, due to the impact from COVID-19.

“Even though some measures were taken to control expenditure, it cannot be done beyond a limit, which would have affected the public. While the revenue receipts have fallen, the expenditure has increased resulting in a deficit situation, which led to the borrowings,” he had pointed out.

As a result, the revised estimate for the borrowings is at ₹92,497.95 crore in 2020-21, when compared to ₹57,802.94 crore that was estimated when the budget for 2020-21 was presented, Mr. Panneerselvam had said, adding that it is well within limits prescribed by the 15th Finance Commission.

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Printable version | Apr 14, 2021 11:59:42 PM | https://www.thehindu.com/news/national/tamil-nadu/tamil-nadus-borrowing-touch-82000-crore-in-fy2020-21/article33980220.ece

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