The findings were part of the RBI’s report ‘State Finances: A Study of Budgets’.

Telanganas debt up by 95 within a span of one year RBI reportImage For Representation
news Debts Saturday, November 24, 2018 - 09:57

Telangana’s debt has gone up by 9.5% in the past financial year, according to the Reserve Bank of India (RBI)’s report on state finances.

The RBI said the state has increased its debt to 22.2% of its Gross State Domestic Product (GSDP) in the Financial Year (FY) 2017-18 as against the 12.7% in the Finacial Year 2016-17.

The findings were part of the RBI’s report ‘State Finances: A Study of Budgets’. The report which looks at the fiscal health of states pointed out that several states are undergoing fiscal stress due to several factors, such as loan waivers and higher borrowing which could negate the benefits of private investments to the states.

According to the RBI, an increase in the debt ratio in GSDP is an indicator of inefficient fiscal management. The RBI’s report supports the annual Comptroller and Auditor General (CAG) reports on Telangana that has often pointed out the poor financial management in the state.

The RBI report also pointed out how non-development expenditure, often meant for administrative expenses, shot up in Telangana within a span of just one financial year. While the non-development expenditure in Telangana was 3.4 % in the Financial year 2016-17, it touched 35.2 % in the financial year 2017-18, said the report.

On Wednesday, P Chidambaram, former finance minister and senior Congress leader had criticised the Telangana Rastra Samithi (TRS) government for pushing the state into debts in tune of Rs 2.2 lakh crore.

"K Chandrashekar Rao borrowed and spent hugely. He is now leaving behind a legacy of Rs 2.20 lakh crore debts. If it was a company with such debts, it will be up for insolvency,” Chidambaram said at his press conference in Hyderabad.

The RBI report also pointed out that Andhra Pradesh, that had suffered financial loses after the bifurcation, has managed to bring down their debt from 36.4% of GSDP in 2016-17 to 27.3% in 2017-18.

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