Fiscally strong states can access foreign funds TS to borrow from abroad

The Telangana State Government is all set to borrow funds from other countries in order to take up infrastructure projects. The Union Cabinet recently approved financially strong states to borrow directly from other countries.

The state government wants to utilise this opportunity to develop infra projects in the city and other major cities. The state government has to give guarantee for such loans and the Centre will give counter guarantee.

The government’s plan to mobilise `80,000 crore through foreign loans to develop infra projects in the city had been pending for over two years with no provision to secure foreign loans directly.

The government submitted proposals to the Union finance ministry to allow it to secure loans worth `80,000 crore from foreign banks like the BRICS BankChina, Rabobank, Netherlands etc for construction of skyways, multi-grade separators, flyovers, beautification of Musi and Hussainsagar and upgradation of the city’s drainage system etc.

However, the Union finance minister did not accord his approval so far. But the Union Cabinet last week approved financially sound states to take foreign loans directly.

“Being a revenue-surplus state and recording a growth rate of over 15 per cent year-on-year, Telangana state qualifies for availing the Centre's recent relaxation on foreign loans. This is a positive development for our state. Due to the absence of this relaxation, several infra projects, especially the strategic road development programme in the city, had been pending since two years,” said an official of the finance department.

The government is also planning to develop urban growth centres in all district headquarters of the state by creating infrastructure facilities and wants to tap foreign funds for the purpose.