7 months ago
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Tamil Nadu government’s off-budget borrowings stood astatine ₹3,919.10 crore arsenic of March 31, 2024. Off-budget borrowings notation to the borrowings undertaken by the State nationalist assemblage for which the main and involvement are serviced retired of State Budgets.
The Tamil Nadu State Financial Responsibility and Budget Management Act (TNFR Act), 2003, defines full liabilities arsenic “liabilities nether the Consolidated Fund of the State and the Public Account of the State”, according to the Comptroller and Auditor General of India’s (CAG) State Finances Audit Report for the twelvemonth 2023-24.
The borrowings made by the corporations/agencies for implementing assorted State-planned programmes, for which the main and the involvement are paid by the State government, are not captured successful its fiscal accounts. These borrowings indirectly adhd to the liabilities of the State, it said.
According to the CAG, Tamil Nadu’s off-budget borrowings were ₹2,298.54 crore arsenic of March 31, 2023. This Included borrowings by the Tamil Nadu Rural Housing and Infrastructure Development Corporation (₹308.71 crore), the Water and Sanitation Pooled Fund- Tamil Nadu Urban Infrastructure Financial Services Limited (₹380.14 crore), and the Tamil Nadu Water Resources Conservation and River Restoration (₹1,591.53 crore), it said.
In 2023-24, the Water And Sanitation Pooled Fund-Tamil Nadu Urban Infrastructure Financial Services Limited made an off-budget borrowing of ₹80.48 crore and the Tamil Nadu Water Resources Conservation and River Restoration made a borrowing of ₹1,591.53 crore, portion the State authorities repaid ₹51.45 crore borrowings of the Tamil Nadu Rural Housing and Infrastructure Development Corporation, CAG said.
To curb off-budget borrowings and bring fiscal subject among States, with effect from FY 2021-22, borrowings made by ‘State-owned entities’, wherever main and/or involvement is serviced done State Budgets and/or duty of taxes/cess oregon immoderate different State’s revenue, are factored successful for the intent of issuance of borrowing consent to State governments, the Union Ministry of Finance said successful Rajya Sabha successful a written reply earlier this year. This was done considering the effect of immoderate States bypassing the Net Borrowing Ceiling utilizing off-budget borrowings.
States, including Tamil Nadu, rise funds done the contented of bonds known arsenic State Development Loans (SDLs). The auction for the bonds is conducted by the Reserve Bank of India (RBI). The bonds are issued for assorted tenures and States person to repay the main on with involvement connected maturity. SDLs signifier a large portion of Tamil Nadu’s outstanding liabilities.
The Union authorities fixes the borrowing ceiling for States. The borrowing ceiling is 3% of the projected Gross State Domestic Product (GSDP) for 2025-26. An further borrowing of 0.5% of the GSDP is allowed for States, contingent connected them undertaking energy organisation reforms and augmentation of intra-state transmission capacity.
The Tamil Nadu authorities plans to get a full magnitude of ₹1,62,096.76 crore during 2025-26 and marque a repayment of ₹55,844.53 crore. As a result, the outstanding borrowing arsenic connected March 31, 2026 volition beryllium ₹9,29,959.3 crore, arsenic per the State Budget for 2025-26.
According to the CAG report, the State’s liability connected relationship of involvement would beryllium ₹29,159.18 crore from 2024-25 onwards, and the main magnitude would beryllium ₹3,88,202.82 crore connected outstanding marketplace loans implicit the adjacent 10 years.
