STATE TO RAISE `1,187 CR VIA BOND AUCTION

The state government has decided to raise another `1,187 crore through auction of bonds by the Reserve Bank of India on Tuesday. With this, the total borrowings of the state government through auction of bonds will cross `30,000crore mark in the current fiscal 2021-22.

The state government has been allowed to borrow `47,500 crore through auction of bonds in

2021-22. It can raise only

`17,500 crore in the remaining three months of this fiscal by March 30 as per FRMB Act. The government is waiting for the Centre to enhance its borrowing limit to mobilise funds for welfare schemes and development programmes.

The state government has sought an increase in FRBM limit from 3.5 per cent of GSDP to 5 per cent. Finance minister T. Harish Rao made a request in this regard to Union finance minister Nirmala Sitharaman in July last. However, the Centre’s nod is awaited.

If the Centre approves, the state government can borrow an additional

`12,000 crore. As the Covid pandemic since March 2020 adversely affected the state government’s finances, the government is depending heavily on loans to fund welfare schemes and development programmes, sources said.

The government’s expenditure in this fiscal has increased due to Dalit Bandhu, Rythu Bandhu, Rythu Bima, subsidised rice, free power to various sections and enhancement of salaries and pensions for employees and pensioners. Though the state government is releasing funds to welfare schemes and development programmes, it owes dues to welfare schemes and bills to contractors, for which it needs to mobilise more loans.