The State Government has introduced a massive budget with focus on welfare of different sections, but it appears to rely more on the market borrowings for fulfilling its promises.
Of the total ₹2.75 lakh crore budget for the financial year 2024-25, the Government plans to mobilise ₹59,625 crore, over 20 per cent of the financial requirement through open market loans. It had simultaneously made provision for close to ₹5,000 crore through loans from the Central Government (₹3,900 crore) and other loans (₹1,000 crore) in the budget presented in the assembly on Saturday. The Government however significantly brought down the estimates of grants in aid and contributions from the Centre to ₹21,075 crore for fiscal 2024-25.
The budget estimates of the fiscal 2023-24 projected receipts of ₹40,615 crore through grants in aid and contributions of which, it realised just ₹13,953 crore. The same was the case with financial year 2022-23 when the Government secured just ₹13,179 crore under the head. This, senior officials said, was because of Chief Minister A. Revanth Reddy’s instructions that a realistic budget be presented rather than the one with inflated estimates.
The State during the past couple of years could not raise market borrowings as projected in the budget estimates as the Union Finance Ministry imposed restrictions on the quantum of borrowings claiming the State had over borrowed during the previous fiscals and after adjusting these over borrowings, the quantum for the year had been fixed.
Asked whether the State would be allowed to raise such huge quantum of open market loans, a senior Finance department official said the Government was simultaneously repaying the dues and this made the State eligible to raise more market loans. Since the repayment had commenced, the debt on account of off budget borrowings would come down from the next fiscal easing the burden on the finances.
The official told The Hindu that effort had been made to see that estimates were prepared in such a manner that “We are confident of spending what all is included in the budget proposals”. About the high projection of non-tax revenue which was pegged at Rs. 20,658 crore, he said the Government had directed the department to explore options to raise the amounts for fulfilling the guarantees it gave to the people. He, however, evaded replies when asked whether sale of lands formed part of raising non-tax revenue. “We are asked to explore options and we will do that,” was all the official said.
