State’s tightrope walk in terms of finances continues as Centre yet to give nod for OMBs 

The State continues to do a tightrope walk in terms of finances following the delays in grant of approval to raise resources through open market borrowings to meet its immediate financial requirements.

Financial assistance of ₹10 lakh each to Dalit families is continuing under Dalit Bandhu, aimed at promoting entrepreneurship among marginalised sections. The Government is likely to face pressure for fulfilling the commitment of crediting ₹5,000 an acre each for over 60 lakh farmers as part of kharif instalment of Rythu Bandhu, the farmers’ investment support scheme, starting next month. The outgo for the first instalment of Rythu Bandhu is likely to be of the order of ₹7,400 crore going by the ₹14,800 crore budgeted for the scheme for the current fiscal.

With mounting pressure on finances on account of the welfare schemes, the government is said to be exploring various options for raising resources and the latest hike in liquor prices is seen as a step in that direction. Officials remained tightlipped on the quantum of additional revenue they are looking at through liquor price hike though. Another option that was reportedly being explored is encashment of fixed deposits made in the name of different departments/corporations to meet the immediate requirements.

“Government of India is being tough with most of the States including Telangana in allowing them to raise OMBs,” was how a Finance department official reacted. Asked whether instructions were given relating to encashment of fixed deposits, the official said: “Not as of now. We are not withdrawing any Fds.”

Asked whether the Government had addressed any communication to the Centre seeking permission to go for OMBs, the official said: “Two letters including one on last Friday have been addressed to the Union Finance Ministry.” There has however been no response to these letters so far.

The State has presented a strong case with the Union Ministry during the video-conference conducted by Union Finance Secretary T.V. Somanathan 10 days ago, but was reportedly faced with several queries regarding the manner in which the funds raised through OMBs were utilised. Though the State had justified investments in projects like Mission Bhagiratha through off-budget borrowings, the replies obviously had little impact on the Centre.

The State’s difficulties were compounded after the reported instructions from Reserve Bank of India to banks and lending institutions relating to advancing loans to Telangana. Even as lending agencies like Power Finance Corporation stopped release of loans amounts to the State since the beginning of the current fiscal, senior officials contended that RBI had not issued any instructions on stoppage of lending to Telangana.

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Printable version | Jul 3, 2022 7:45:09 pm |