Quite often, Telangana chief minister K Chandrasekhar Rao says his state is the richest in the country and that his government is revenue surplus.
Even during the third anniversary of the Telangana formation and again in his independence day speech, KCR made the same claim.
But sources say things are not so rosy as KCR claims to be with regard to state finances.
According to reports, the state is virtually running on debts and the mounting debts would completely ruin the state finances from 2019.
The government had taken huge loans for its flagship schemes like Mission Bhagiratha and Mission Kakatiya, besides irrigation projects like Kaleshwaram and Palamuru-Ranga Reddy.
The latest loan of Rs 9000 crore taken by the Telangana government under rural electrification programme UDAY is believed to be the major burden on the state exchequer. As part of its repayments the state has to pay around `900 crore every year.
According to media reports, the CAG had raised alarm pointing out that payments on loans taken for Mission Bhagiratha and other irrigation projects would kick in from 2019, when the two-year moratorium on repayment ends, causing a financial burden on the state.
The UDAY loan repayments have advanced that schedule, with the pinch being felt this September to the extent that finance department were in a fix when Chief Minister K Chandrasekhar Rao readily accepted state government employees’ demand for advance payment of salary for Dasara.
The State’s salary bill is Rs 2,500 crore per month but in this same period, receipt of Central Tax devolution of around Rs 1,200 crores was delayed by 15 days and the State was supposed to make a payment of Rs 450 crore for UDAY in September.
The officials were left with no option but to go in for further borrowings in September to pay the salaries as per the employees’ demand.
Populist schemes such as sheep distribution have further strained State finances.
“We have spent Rs 1,000 crore so far on sheep distribution. With successful launch of the programme, we have to spend another Rs 1,000 crore this year. But, we are already facing a cash crunch,” official said.
