HYDERABAD: Hit hard by Covid-19 and hobbled by a severe fund crunch, the Telangana government will raise Rs 3,000 crore via bonds.
This is the highest single-day fund raise via bonds since the state’s formation.
This will also be the highest-ever total auction value in the April-June financial quarter.
The auction on Tuesday will take the total amount raised by the state government in this financial quarter to Rs 11,500 crore.
Sources in the government said that the funds would be used for the implementation of Rythu Bandhu scheme for this season.
There is an additional requirement of Rs 1,000 crore for the implementation of the PRC recommendations for state government employees.
Experts said this would be much more than what was indicated by the state government to Reserve Bank of India for the financial quarter.
Telangana authorities said it would raise Rs 8,000 crore in this financial quarter as the government had already raised Rs 3,500 crore with the auction of bonds on June 1 and June 8 of this month.
There is also a plan to raise bonds on June 22 and June 29 of this month.
In addition to raising extra bonds, the government has also planned land auctions.
When contacted, Planning Board vice chairman B Vinod Kumar said the auction was not worrisome as there has been a very good response for the auction at RBI for state development loans.
“Depending on the response from the buyer, RBI allows the state their limits.
We always had a good run with bonds, with long term repayment schedules and low interest rates,” he said.
There is a dip in the revenues to the tune of Rs 3,000 crore due to lockdown in the month of May.
Sources in the government said even if the state earns Rs 8,000 crore extra this year as GST and other taxes, there will still be some fund shortage.