Centre has rewarded Telangana for its good fiscal discipline and financial performance by accepting its demand to increase the limit of borrowing from the market for capital and infrastructure project.
According to the top officials of the State Finance department the long pending demand of the State for increasing the Fiscal Responsibility and Budget Management (FRBM) limit by 0.25 per cent was accepted by the Centre. It will result in the State getting access to additional `1,561 crore for spending on various projects.
Chief Minister K Chandrasekhar Rao had raised the issue with the Centre including the Niti Ayog and the Union Finance Minister Arun Jaitely over the last one and a half years to increase the limit based on the good performance and the surplus revenue of the State.
While the FRMB rule allows the states to borrow only upto three percent of their GSDP, Telangana is one of the six states in the country who have a higher limit on the basis of their performance and good revenue position.
Telangana is the beneficiary of the decision of the 14th Finance commission that that 3 per cent norm can be relaxed and increased to 3 per centif a state meets three criteria. They include revenue surplus, total borrowings are less than or equal to 25 per cent of the State GSDP and total interest payment is less than or equal to ten percent of GDSP in a given year.