Stating that the two terms of Bharat Rashtra Samithi (BRS) government were nothing but financial anarchy leaving the State with a whopping debt of ₹ 6,71,757 crore, Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka said, while presenting a white paper on the State finances in the Assembly on Wednesday, that the outstanding debt is likely to touch ₹3,89,673 crore at the end of the financial year 2023-24, which excludes off-budget borrowings.
The white paper said that from an outstanding debt of ₹72,658 crore in 2014-15 it will touch ₹ 3.86 lakh crore by 2023-24 as per the current budget estimates. When Telangana was formed in 2014 it was a surplus State.
According to the white paper, the outstanding debt of ₹3,89,673 crore is apart from the off-budget borrowings of the government which were guaranteed by the government but taken through Special Purpose Vehicles (SPVs) created by the government.
The white paper further said that 17 SPVs raised ₹1,85,029 crore through off-budget borrowings in the name of mega projects such as Kaleshwaram, Palamuru Rangareddy, Sitaramasagar and Mission Bhagiratha. Since these institutions don’t have sufficient revenue sources it would be the government that has to repay the principal as well as the interest. Such outstanding debt as of today is ₹ 1.27 lakh crore and this doesn’t reflect in the State finance books but is still a burden on the State as the government has to repay the amount ultimately.
Loans were raised in another category where the loans taken by corporations are not guaranteed by the government. These loans are also repaid by the corporations themselves without any debt servicing burden on the government. As of today, the total outstanding debt in this category is ₹59,414 crore.
The white paper further revealed that since the formation of Telangana in FY 2014-15, the Budget estimates and actual expenditure figures of the State saw an upward trend. Starting with ₹1,00,638 crore in FY 2014-15, the budget estimates grew to ₹2,56,859 crore in FY 2022-23.
The actual expenditure figures also witnessed an ascending pattern from ₹62,306 crore in FY 2014-15 to ₹2,04,085 crore in FY 2022-23. The percentage share of actual expenditure in the overall budget estimates, however, was worrisome. Actual expenditure as a percentage of Budget estimates was at its lowest level (61.9%) in FY 2014-15. In the period between 2014-23, on an average, Telangana actually spent only 82.3% of the budgeted expenditure.
The debt-to-GSDP ratio of the State was one of the lowest in the country in 2015-16 at 15.7% but by 2023-24, the same ratio went up to 27.8%, almost doubled in eight years. The debt-to-GSDP ratio has had an overall increase. The BRS government failed to contain the debt-to-GSDP ratio within the 25% ceiling recommended under the Fiscal Responsibility and Budget Management (FRBM) Act.
