Telangana, which has planned to spend Rs1.3 lakh crore during 2016-17, is under a huge debt burden of Rs1.23 lakh crore, according to the Budget estimates presented by the State Finance Minister Etala Rajender.
This has triggered a political slugfest in the State with the principle Opposition party Congress alleging that the K Chandrashekar Rao Government has pushed the two-year-old State into a debt trap for next 20 years.
The debt estimate of Rs1,23,821.49 crore indicates more than 50% rise since 2014-15 when it stood at Rs83,845.76 crore.
Telangana was formed in June 2014 and inherited a debt of Rs61,710 crore and it went upto 1,00,707 crore in 2015-16. It was set to further increase in the coming fiscal year with the State Finance Minister proposing to borrow another Rs23,113 crore. It will take the outstanding debt to 18.46% of the State GDP up from 16.06% this year.
The debt servicing by the State Government was also likely to increase as most of the new borrowings were from the open market. The open market loan of the State stood at whopping Rs93,284.40 crore.
As far as per capita debt burden was concerned it was Rs35,373.72 against the per capita income of Rs1.43 lakh.
Opposition Congress party has blamed the failure of KCR Government for the sky rocketing debt burden of the State. State Congress president Uttam Kumar Reddy said that the TRS Government since it came to power 21 months ago accumulated huge debts due to its inefficiencies and financial mismanagement.
“The Government has doubled the per capita debt burden”, he said. “This is utter mismanagement”. The Congress was now planning to corner the TRS Government in legislature.
“This Government is thinking the state into debt trap for next 20 years”, he added.
However State Finance Minister Rajinder rejected the Opposition’s criticism. He said the the objective of debt management in the State was to ensure that the financing of the Budget and refinancing of debt was done at the lowest possible cost in the medium to long term, all within prudent limits of risk.