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Centre to hold meet, Telangana finance secretaries may get clarity on loan calendar today | Hyderabad News
HYDERABAD: After denying clearance for several states, including Telangana, to raise bonds thrice at Reserve Bank of India ( RBI), the Union government is all set to conduct a meeting with state finance secretaries on Monday to provide clarity on loan schedules and the path ahead.
As RBI had sought details of loans taken by states over the years, particularly bank guarantees given to corporations that were not mentioned in budget documents, many states’ loan calendar did not begin in the new fiscal (2022-23).
Telangana, however, responded to RBI’s request for information by sending details about the state’s bank guarantees and loans. According to sources, the central bank has requested more information so clearance for the financial year’s loan schedule was not yet granted.
Telangana has missed three bond bidding dates and was supposed to raise 6,000 crore in the form of bonds. “The meeting is likely to take place on Monday, and we will get clarity on the road ahead,” sources said. “Even if the scheduled was missed, we can rework for them, but we are waiting for clarity,” the sources added.
Except Andhra Pradesh, loan schedules of all southern states have been put on hold. However, Andhra Pradesh was granted permission with some conditions. Telangana’s loan burden is approximately 4 lakh crore, which includes 1.5 lakh crore bank guarantees given to state-owned corporations. The meeting is significant because the next fixed date for the loan calendar is May 17.
States could borrow no more than 40% of their Gross State Domestic Product (GSDP), according to the Fiscal Responsibility and Budget Management (FRBM) rules. While Telangana adhered to this rule, many states have exceeded 40% of GSDP ratio. “The main concern has been the bank guarantees to RBI,” according to the sources.
As RBI had sought details of loans taken by states over the years, particularly bank guarantees given to corporations that were not mentioned in budget documents, many states’ loan calendar did not begin in the new fiscal (2022-23).
Telangana, however, responded to RBI’s request for information by sending details about the state’s bank guarantees and loans. According to sources, the central bank has requested more information so clearance for the financial year’s loan schedule was not yet granted.
Telangana has missed three bond bidding dates and was supposed to raise 6,000 crore in the form of bonds. “The meeting is likely to take place on Monday, and we will get clarity on the road ahead,” sources said. “Even if the scheduled was missed, we can rework for them, but we are waiting for clarity,” the sources added.
Except Andhra Pradesh, loan schedules of all southern states have been put on hold. However, Andhra Pradesh was granted permission with some conditions. Telangana’s loan burden is approximately 4 lakh crore, which includes 1.5 lakh crore bank guarantees given to state-owned corporations. The meeting is significant because the next fixed date for the loan calendar is May 17.
States could borrow no more than 40% of their Gross State Domestic Product (GSDP), according to the Fiscal Responsibility and Budget Management (FRBM) rules. While Telangana adhered to this rule, many states have exceeded 40% of GSDP ratio. “The main concern has been the bank guarantees to RBI,” according to the sources.
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