State intensifies efforts to ease burden on exchequer of high interest loans taken by BRS

The State government has intensified its efforts to ease the burden on the State exchequer due to the loans secured by the BRS government at high interest rates.

Accordingly, the government has decided to raise open market borrowings of ₹9,600 crore during the October–December quarter, going by the indicative calendar released by the Reserve Bank of India. The State will cross the limit of ₹54,009 crore fixed by the Union Finance Ministry for the current year by the end of nine months, with one more quarter to go in the financial year if it raises the indented quantum of borrowings.

The State has raised borrowings in excess of the amounts indicated in the indents made to the RBI during the first two quarters and thereby, approaching the limit set for the current financial year. A major portion of these borrowings, with interest rates below 8%, have reportedly been utilised to repay loans carrying double digit interest.

The State, according to the Comptroller and Auditor General of India, has raised ₹33,415 crore borrowings till the end of August. Another ₹17,000 crore of market borrowings were raised during September in four tranches taking the overall figure to around ₹50,000 crore with six more months to go for the conclusion of the fiscal year.

Senior officials asserted that the State has received consent from the Union Finance Ministry to restructure the high-interest loans with loan interest ones. The move was aimed at reducing the burden on the exchequer and the restructuring of loans will enable the State to save significant amounts in the form of interest payment.

“We will get more. Restructuring has started already,” a senior Finance department official told The Hindu. The government’s efforts to wriggle out of the impact of the loans obtained by the previous regime could be seen from the fact that the government repaid ₹10,148 crore of the total outstanding government securities of ₹16,740 crore (₹15,848 crore OBBs and ₹892 crore through UDAY loans) till September 12 with the balance ₹6,592 crore due for maturity in the next six months.