HYDERABAD: The white paper on state finances released by the
Congress
government expressed apprehension about escalating
total debt servicing burden
(repayment of interest and principal for debt taken) of Telangana over the past nine years.
In the fiscal year 2014-15, the combined principal and interest burden for the ‘within budget’ component stood at Rs 6,954 crore.
Subsequently, these payments witnessed double-digit increase every year except FY 2020-21. By FY 2023-24, the overall debt servicing burden within the budget soared to Rs 32,939 crores, marking an annual average growth rate of 22%.
The white paper highlighted a contrasting surge in the debt servicing burden arising from off-budget borrowings, experiencing an annual average growth rate of 73%. Consequently, their proportion of the total debt servicing burden rose significantly from 4% in FY 2014-15 to 39% in FY 2022-23. Additionally, the paper expressed concern that the top five corporations, representing 95% of all outstanding government guarantees, secured loans with average interest rates ranging from 8.93% to 10.49%, considerably higher than the 7.63% average interest rate for open market borrowings. The white paper noted, “As corporations lack a major source of revenue, the government effectively bears the greater interest load, limiting their financial situation.”
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