“Telangana’s Financial Landscape Unveiled: White Paper Exposes Staggering Debt and Fiscal Challenges”
Hyderabad : – Deputy Chief Minister Mallu Bhatti Vikramarka, also the Finance Minister of Telangana, presented a White Paper on the state’s finances in the Telangana State Assembly on Wednesday. The report highlighted a staggering total cumulative debt of ₹6,71,757 crore, including off-budget borrowings.
Vikramarka, in his opening remarks, attributed the financial challenges to the preceding 10 years under the BRS rule, characterizing the period as one of financial anarchy.
The outstanding debt of the state, excluding off-budget borrowings, is anticipated to reach ₹3,89,673 crore by the end of the financial year 2023-24. Starting at ₹72,658 crore in 2014-15, the debt increased at an annual average rate of 24.5 percent, reaching ₹3,52,061 crore by 2022-23 (revised estimates). Budget estimates for 2023-24 project the debt to further rise to ₹3,89,673 crore.
The White Paper noted a significant shift in the debt-to-GSDP ratio, which was 15.7 percent in 2015-16 but surged to 27.8 percent by 2023-24. The ratio has nearly doubled over eight years, revealing an overall increasing trend averaging 21.5 percent from 2014 to 2022. In violation of the Fiscal Responsibility and Budget Management (FRBM) Act, the state failed to cap the debt-to-GSDP ratio within the recommended 25 percent ceiling in 2020-21 and 2021-22.
The report delved into off-budget borrowings, highlighting loans guaranteed by the state but availed by entities outside the government system. Notably, the debt-to-GSDP ratio could rise to 36.9 percent if government-guaranteed loans raised by Special Purpose Vehicles (SPVs) were included.
Seventeen SPVs and institutions raised ₹1,85,029 crore through off-budget borrowings, requiring government support for repayment. Another 14 SPVs and institutions secured ₹1,18,557 crore in guaranteed off-budget borrowings, with the capacity to service their debt. The total outstanding debt in this category stands at ₹95,462 crore.
A third category involves loans by corporations not guaranteed by the government, with a current outstanding debt of ₹59,414 crore, being serviced independently by the corporations. The White Paper emphasized the importance of considering all these liabilities in assessing the state’s total debt burden.
