Narendra Modi’s government had sent a sweet news for Telangana government ahead of the Telugu New Year, Ugadi. The Union cabinet the other day cleared the long-pending demand of the Telangana government to increase the fiscal responsibility and budget management (FRBM) limits. This will allow additional 0.5 per cent FRBM limit for the state.
The cabinet has taken the decision on the recommendations of the 14th Finance Commission. With the increase of FRBM limit from 3 per cent to 3.5 per cent, Telangana can avail Rs 3,000 crore additional borrowings from financial institutions. According to the current norms, Telangana could borrow up to three per cent of its gross state domestic product (GSDP), which comes to about Rs 12,000 crore.
The state government is pitching for the increase as its growth is more than the national average of 8.6% and can afford more loans for being a wealthy state. After much deliberations, Central government allowed it. Andhra Pradesh is also making a similar demand stating its bad finances but the center is yet to take any decision on that.