The State government is struggling hard to mobilise finances to meet the requirements for effectively implementing the spree of welfare programmes, including the cash-intensive Rythu Bandhu, the farmers investment support scheme.
The amounts raised through open market borrowings (OMBs) during the last couple of years through the Reserve Bank of India are indicative of the stress on the government finances which were further affected by the lockdown and the consequent slowdown this financial year.
According to the RBI data on market borrowings by the government, the State’s net OMBs stood at ₹ 22,183 crore for the financial year 2018-19 against the projected gross of ₹ 26,740 crore.
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The borrowings rose significantly during the fiscal 2019-20 with the net OMB standing at ₹ 30,697 crore against the gross borrowings of ₹37,109 crore. The borrowings during the first two months of the current fiscal, according to the RBI bulletin, were to the tune of ₹6,750 crore.
The tentative borrowing schedule released by the RBI indicated that the government was set to raise OMBs of ₹ 9,000 crore during the first quarter and another ₹ 10,000 crore during the second quarter ending September. The actual borrowings in the form of State development loans and auction of State securities during the first quarter were around ₹ 12,500 crore and the government had raised around ₹ 4,000 crore in two instalments during the current month.
The borrowing comes at a time when the Department of Expenditure of the Union government had fixed the ceiling for open market borrowings by the State for first nine months of the current financial year at ₹ 15,051 crore.
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The DoE in its communication at the end of the last fiscal however permitted the apex bank to make necessary arrangement in consultation with the State government to raise the open market borrowing limits. Further consent for raising the OMB should be processed after receiving complete information from the State government, the communication said.