The Telangana government is scrambling for debts. Officials are roaming around offices in Delhi for loans for government management, implementation of schemes, irrigation projects and construction of power plants. Efforts to appease financial institutions, including the Reserve Bank of India (RBI), have intensified. Government management is becoming more difficult every month without funding adjustment. Together with the direct loans taken by the government, the total loans taken by the Ways and Means and the guarantees to the corporations have already crossed Rs 4.50 lakh crore. It is against this backdrop that the state is taking on debt beyond its means and the RBI is not allowing new loans and bond auctions as it is sure to go bankrupt financially if it continues like this. Financial institutions are also not lending to corporations with RBI restrictions. This has disrupted projects as well as work on power plants. These contractors have to pay billions of rupees. Gattekkalante had no choice but to take on new debts to get out of these situations.
It was during this period that the Finance, Energy and Irrigation Special CSs engaged in new debt collection. Ramakrishna Rao, the special secretary of the finance ministry, returned to Delhi for five days trying to get the debts approved. Energy Special CS Sunil Sharma stayed in Delhi for several days and held consultations with finance companies for loans to these Bhadradri and Yadadri power plants. Special CS Rajat Kumar of the Irrigation Department went to Delhi to discuss with the financial institutions for the loans required for these projects. CMVO secretary Smita Sabharwal has already traveled to Bhopal to discuss the supply of motors and pumps required for lifts with BHEL officials. There was no benefit, however. It is in this context that the authorities are intensifying their efforts for debt.
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Meanwhile, the government needs Rs 4,000 crore to pay interest and installments on loans taken so far. Government management, salaries, pensions and support pensions require Rs 5,500 crore per month. In June, Rs 7,400 crore was to be deposited in farmers’ accounts under the Raitubandhu. Including payments for rural and urban development and payments for other development projects, the total requirement for June was over Rs 26,000 crore. The farmer’s bond is to be credited to the farmers’ accounts in January and June. Excluding these two months, the remaining 10 months will cost between Rs 17,000 crore and Rs 18,000 crore per month. The state is likely to get up to Rs 9,000 crore in revenue in the form of GST, registrations, excise and other tax collections. An additional Rs 1,000 crore will have to be adjusted with the inflated prices, but another Rs 16,000 crore will have to be adjusted by June. The remaining months will see a funding shortfall of over Rs 7,000 crore.
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On the other hand, the state government is taking loans from financial institutions to build Bhadradri and Yadadri power plants. The work to be done along with the pending bills related to these requires huge funding. Other projects, including the Palamuru-Rangareddy, Kaleswaram and Sitarama uplifts, are not in a position to adjust funding from the budget except to borrow from financial institutions. The Irrigation Department already has bills of up to Rs 8,000 crore. Contractors are warning not to do things unless they are clear.
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