Fact Check: Telangana government did not raise loans from World Bank

Social media users claimed that Telangana has raised huge debts from the World Bank.

By Sabya Singh  Published on  8 March 2022 1:10 PM GMT
Fact Check: Telangana government did not raise loans from World Bank

Hyderabad: Social media users claimed that Telangana has raised huge debts from the World Bank.

Users also claimed loans for the construction of the Kaleshwaram Lift Irrigation project were also raised from the World Bank.

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Fact Check:

The claim is false.

Telangana State budget 2021-22 has provided the details of the actual debt of the state. By the end of March 2020, the debt is at Rs. 1,94,957.74 crore.The total outstanding public debt is Rs. 2,86,804.64 crore. Of which the loans raised through the open market are Rs. 2,44,538.88 crore. The rest of the debts were raised through financing instruments like corporations, banks, central government, Provident fund, etc.

Detailed composition of loans raised from different sources and repayments made over the years are mentioned in the budget documents. Even RBI's study of state budget document mentioned the detailed composition of loans obtained through various sources of each state. Even there, is no mention of Telangana raising loans from the World Bank.

According to the budget, loans for the Kaleshwaram project were raised through separate corporations established under the irrigation department like Kaleshwaram Irrigation Project Corporation Limited (KIPCL) and Telangana State Water Resources Infrastructure Development Corporation Limited (TSWRIDCL).

Responding to a question, the Union government in the Lok Sabha stated that a little over Rs. 86,000 crores were sanctioned for the construction of the project in the form of loans from various corporations and consortiums of nationalized banks.


Article 293 (3) of the Indian Constitution states that State governments cannot raise loans without the Centre's consent if it has any loan outstanding which is repayable to the Government of India. Also, unlike the Centre, States usually do not directly borrow from external sources.

https://doe.gov.in/permission-loans-under-article-293-3-constitution

Back in 2017, the center has allowed financially sound states to borrow directly from external sources for their development projects. However, these borrowings would be included under the State's borrowing limits set by the FRBM.

https://www.thehindu.com/business/Industry/states-can-seek-overseas-loans-for-projects/article18148096.ece

Several states have received Development policy loans (DPLs) from the World Bank. Erstwhile Andhra Pradesh and Telangana have also received these loans in areas concerning the social development of the state. However, these loans are transferred to the states through the concerned central ministry and not directly to the state.

https://projects.worldbank.org/en/projects-operations/projects-list?countrycode_exact=IN&os=0

Hence, the claim is false.

Claim Review:The reason for the debt position of Telangana is that the state has raised huge debts from the World Bank
Claimed By:Social Media Users
Claim Reviewed By:Newsmeter
Claim Source:Social Media
Claim Fact Check:False
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