Hyderabad: Telangana will have an outstanding debt of Rs 6,71,757 crore, including non-guaranteed loans of corporations or institutions by the end of FY 24 against Rs 72,658 crore in 2014-15, the state government said.
A white paper on Telangana State Finances, which was tabled by Deputy Chief Minister and Finance Minister Bhatti Vikramarka Mallu in the State Assembly on Wednesday morning, stated that the total debt burden will increase to Rs 3.86 lakh crore by the end of this fiscal.
The white paper, covering 11 topics including ‘Budgeted vs Actual expenditure of Telangana’, ‘Outstanding debt trends’, ‘Increasing debt servicing burden’, and ‘Expenditure on education & health’, noted that the state had an outstanding debt of Rs 72,658 crore in FY14-15, which has now gone up to Rs 3.52 lakh crore by FY22-23 (RE).
The debt servicing burden of monies that are borrowed on the budget and off-budget has increased enormously and is consuming 34 percent of the state’s revenue receipts while the salaries and pensions of employees consume another 35 percent of the state revenue receipts, a government document said on Wednesday.
The report said as per current budget estimates (BE), the debt will touch Rs 3.86 lakh crore by end of FY23-24.
Telangana was a revenue surplus state in 2014 and was one of the fastest-growing economies in the country at that time.
According to the white paper, no tangible fiscal assets in proportion to the money spent were created in the past 10 years.
Finance Minister Vikramarka started the White Paper by stating that in 2014 Telangana had started on a firm footing on the fiscal front.
“There was a revenue surplus during the first 5 years. The fiscal responsibility norms were also broadly adhered to. The situation of the State started changing quite drastically once the off-budget borrowings started being mobilized in the name of mega projects such as Kaleshwaram, Palamuru Rangareddy, Sitarama and Mission Bhagiratha. Special Purpose Vehicles (SPVs) were created to mobilize the necessary resources for undertaking these mega capital-intensive projects,” he said.
The report further said that there is enormous fiscal stress and the state has not been able to spend enough money on critical sectors, such as education and health where the budgeted amount as the proportion of the total expenditure was among the lowest in the country.
“Large-scale mobilization of the off-budget borrowings and lack of revenues to the SPVs meant that effectively the government guaranteed loans were being serviced by the government itself from the budgetary resources. This meant a rapid increase in the debt servicing by the State. Therefore, the balance of fiscal space available for the welfare and development of the State of Telangana came down year by year,” he stated.
On the efforts of the new government, the Finance minister said that the new government, led by CM Revanth Reddy, would work to increase the state’s resources and direct expenditures toward uplifting the impoverished, while reducing unnecessary spending.
“The new government is determined to implement all the six guarantees which are promised by the party based on which the people of Telangana had given the mandate for change. The state government is determined to overcome the fiscal challenges in a responsible, prudent and transparent manner. The white paper on State finances is the first step in this direction,” Vikramarka said.