A SHOCKING BEQUEST

KCR’S INDISCRIMINATE BORROWINGS LEFT TELANGANA WITH A HUGE PILE OF DEBT. OVER THE NEXT DECADE, THE STATE WILL PAY DEARLY FOR THE EX-CM’S WHIMS

- Amarnath K. Menon

IT was his maiden I-Day address, but Chief Minister A. Revanth Reddy had little good news for his people. "Telangana's debt burden has gone up by 10 times since the state was created in 2014. Total debt was Rs 75,577 crore then...it was Rs 7 lakh crore in March," he said. That said, there was apparently a way out: during his US tour in early August, the World Bank had shown interest in retiring some of the high-cost loans. This, the CM hoped, would lessen the burden imposed on the state by the "indiscriminate borrowings" of the earlier K. Chandrashekar Rao (KCR) regime.

The Congress government has now released a white paper on the state's finances. "My government will not commit the mistakes of borrowing funds at high interest rates, putting a heavy burden on the people. Despite the financial hurdles, the government is making every effort to fulfil the pre-poll promises of Abhaya Hastham (the slew of guarantees in the Congress manifesto)," Revanth emphasised.

Top of the list was the daunting write-off of farm loans up to Rs 2 lakh, which involves a financial outflow of Rs 31,000 crore. Though the party's political rivals claim the loan waiver scheme is flawed, the Congress government has made it happen to prove its farmerfriendly credentials.

FRAGILE FINANCES

When it was carved out of Andhra Pradesh in 2014, Telangana began as a revenue-surplus state. So, what happened in the 10 years that KCR's Bharat Rashtra Samithi (BRS) ruled the state? An alarming rise in total liabilities, and an unsustainable and mounting debt service burden, as the Comptroller and Auditor General (CAG) observed in its 2022-23 report. 'Outstanding loans account for 35.6 per cent of the state's Gross State Domestic Product (GSDP), which is more than the permitted limit of 29.7 per cent of the 15th Finance Commission,' it said.