Centre Owes Over Rs 1 Lakh Crore To Telangana: Minister T Harish Rao

The Finance Minister said the Central government was adopting double standards in implementing the FRBM Act by imposing restrictions on the States but not practising them.

Telangana Finance Minister T. Harish Rao speaking in the assembly

Source : ABP Desam

Telangana Finance Minister T Harish Rao, on Tuesday in the assembly, claimed that the Centre owes Rs 1,05,812 crore to Telangana as pending funds, grants and compensation. If paid per norms and recommendations, the state government can clear one-third of its Rs 3.29 lakh crore of state debts, said Harish Rao.

In response to the brief discussion on "Central government dual policy in execution of FRBM Act - Impact on state success," he stated that if the Center provided these funds, the state would not even be necessary to issue new debt.

Harish Rao claimed that the state was suffering due to the Centre's unilateral choices and limitations placed on the state's ability to borrow loans under the Fiscal Responsibility and Budget Management (FRBM) guidelines.

The Finance Minister said the Centre was adopting double standards in implementing the FRBM Act by imposing restrictions on the states but not practising them. Despite the 15th Finance Commission's recommendation to form a powerful intergovernmental committee of the Central and state governments to examine the borrowings, the Center unilaterally decided to put limits on the states' borrowings without first forming the committee. Furthermore, these limitations are being implemented retroactively, said Harish Rao.

He dismissed the BJP's criticism of the Telangana state's debts. He asserted that the state government used its borrowings to fund capital expenditures and the creation of assets, in contrast to the Union government, which borrowed loans to repay its debts. He pointed out that the state took up irrigation projects like the Kaleshwaram project Mission Bhagiratha, Mission Kakatiya and other programmes which supported the state.

FRBM Act

The Fiscal Responsibility and Budget Management Act (FRBM Act), 2003, establishes financial discipline to reduce the fiscal deficit.

The FRBM Act aims to make India's fiscal management procedures more transparent. Long-term goals of the Act include giving the Reserve Bank of India (RBI) flexibility to address inflation in India and helping India achieve fiscal stability. To ensure a more equitable distribution of India's debt over time, the FRBM Act was passed.

(With inputs from ABP Desam, IANS)