With the Union Government slowing down funds flow to the State, the Odisha Government has decided to go in for market borrowing this fiscal to keep funding the ongoing infrastructure projects.
"The State Government has gone for market borrowing of Rs 1,000 crore and may raise Rs 500 crore each in two phases during the current fiscal," Additional Chief Secretary Finance R Balakrishnan told reporters replying to media after Finance Minister Pradip Kumar Amat presented the Supplementary Budget for the 2015-16 fiscal here.
Stating that the State Government for the last time in 2005-06 had gone for market borrowing, Balakrishnan claimed that Odisha has much better liquidity position due to its own tax and non-tax revenue generation.
He, however, said the State could raise up to Rs 6,000 crore as per the budgetary provisions made in the 2015-16.
The ACS Finance said that the State raised Rs 1,000 crore from the open market at the rate of interest of only 8.03 per cent in comparison to Gujarat's 8.15 per cent.
"We had sought a borrowing of Rs 1,000 crore from the market while people came out to provide Rs 4,000 crore to Odisha due to its better financial position," Balakrishnan claimed.
Sources said the major infrastructure projects under AIBP, PMGSY and road are facing acute shortage of funds as Centre is not releasing funds for these Centrally Sponsored Schemes.
The drastic reduction in monthly instalment of State’s share in Central Taxes by Government of India had adversely affected the liquidity position of the State Government, admitted an officer.
Replying another question, Balakrishnan said Odisha's debt burden till end of October was Rs 43,560 crore which could rise up to Rs 56,630 crore by end of the 2015-16 fiscal.