Hyderabad: Telangana's public debt stands at Rs. 2,37,747 crore as of 30 November 2021 out of which Rs. 2,34,912 crore is internal debt and Rs. 2,835 crore is external debt, the Union minister of state for finance Pankaj Chaudhary said while replying to a question posed by Malkajgiri MP Anumula Revanth Reddy in the Parliament.
Public debt means the total borrowings of a government to meet its development budget during a particular period. The government borrows either from within the country which is called internal debt of the government and from outside the country which is known as external debt.
No Central grant to TS from 2017-18 to 2021-22
One of the main sources of internal borrowings for a state government is the Reserve Bank of India.
The minister said the RBI has not extended any loan to Telangana but it supports the state government in fixing temporary mismatches through financial accommodation in the form of Special Drawing Facility (SDF), Ways and Means Advance (WMA), and Overdraft.
SDF is extended by the RBI against collateral like government securities held by the state government. It depends on the investments of the concerned state government in the Central government.
WMA is the temporary loan facility that is provided by RBI. This is used when the government needs immediate cash. This loan facility is for a period of 90 days. If that limit is crossed, it is treated as an Overdraft. Overdrafts are not allowed beyond 10 consecutive working days.
Additional Central Assistance (loans or grants) is provided by the Centre for the implementation of externally aided projects (EAPs) funded by international agencies like the government of Japan (JICA), Asian Development Bank (ADB), World Bank, and the International Bank for Reconstruction and Development (IBRD).
According to the data on additional Central assistance to Telangana, in 2016-17 the Centre extended a grant of Rs. 30.72 crores to Telangana. But since then, the state has not received any grant for five consecutive years.
The loans given by the Centre for various projects in the state also dropped from Rs. 956 crores in 2016-17 to Rs. 207 crores in 2019-20 and to nil in 2021-22.
Loan and interest repayments
Besides RBI, the Telangana government borrowed mainly from three foreign agencies - JICA, IBRD, and International Development Association (IDA). As of 12 December 2021, the state government had repaid loans amounting to Rs. 67.66 crores for the year 2021-22 – Rs. 29.45 crores to JICA, Rs. 32.06 crores to IBRD, and Rs. 6.15 crores to IDA.
An interest of Rs. 11.85 crores was also paid by the state government in 2021-22 out of which Rs. 5.96 crores was paid to JICA, Rs. 4.56 crores to IBRD, and Rs. 1.33 crores to IDA.
What is left to be paid?
JICA is Telangana's major lender for funding infrastructural projects, followed by IBRD and IDA. The minister, Pankaj Chaudhary, revealed that the state owes a total of Rs. 154.84 crore of the principal amount and Rs. 24.68 crore interest to be payable in 2021-22 to JICA, IBRD, and IDA. Out of this, the state owes a principal amount of Rs. 71.37 crores and interest of Rs. 14.37 crores to JICA, Rs. 63.62 crores principal amount and Rs. 7.92 crores interest to IBRD, and Rs. 19.85 crores and Rs. 2.39 crores to IDA.
Also, it is estimated that for the year 2022-23, the government is liable to pay Rs. 153.57 crores of principal amount and Rs. 21.81 crores of interest, and for 2023-24 it has to pay Rs. 153.62 crores principal amount and Rs. 20.72 crores interest to the three foreign agencies.