FRBM increase pushes TS further into debt trap: CLP
CLP Leader Bhatti Vikramarka says government would require ₹50K cr every year by 2024 for debt servicingby Special Correspondent
The Congress Legislature Party (CLP) has observed that by amending the Fiscal Responsibility and Budget Management (FRBM) Act to increase the borrowing limit as allowed by the Centre, the Telangana Rashtra Samithi (TRS) government would push the State further into the debt trap.
Speaking to media persons in the Gun Park, a martyrs memorial, in front of the Assembly buildings here on Monday, due to closure of the media point on the premises of the Assembly by the State government in the name of preventing COVID-19 spread, CLP Leader Mallu Bhatti Vikramarka said the TRS government had already pushed the State into debt trap by borrowing about ₹3.6 lakh crore during the last six years and the FRBM increase would allow it to borrow ₹55,000 crore more.
Speaking along with party legislators — D. Sridhar Babu, T. Jayaprakash (Jagga) Reddy, D. Anasuya (Seethakka) and T. Jeevan Reddy — Mr. Vikramarka said the increase in the FRBM limit would allow the State government to borrow ₹55,256 crore more loans. Besides, the government had also got the borrowing capacity of its various corporations doubled. Since the State government would stand guarantee for such loans, they would be indirect borrowings of the government.
Mr. Vikramarka explained that the amended FRBM would allow the State government get the corporation loans and its guarantees to nearly ₹2.22 lakh crore and by 2023-24 the debt of Telangana was expected to reach about ₹5.81 lakh crore. He criticised the government for pushing the FRBM Amendment Bill with the help of its numbers, in spite of strong opposition expressed by the Congress in the House.
Explaining the impact of borrowings on people in the State, the CLP Leader said in 2019-20 the government had spent ₹23,840 crore for debt servicing, for repayment of loans along with interest, with the total borrowings standing around ₹3 lakh crore and ₹50,000 crore per annum would be required for debt servicing when they would reach ₹6 lakh crore.
Taking the revenue earnings at about ₹1.1 lakh crore per annum into account, keeping aside ₹50,000 crore for debt servicing and ₹40,000 crore salaries to government employees the Government would have nothing at its disposal for welfare and development schemes. Any new work would require new borrowings, he felt and added that such a scenario would have no money for implementing flagship schemes such as Rythu Bandhu, Rythu Bima, social security pensions, maintenance of irrigation projects, fee reimbursement and others.