Telangana CM requests Jaitley to raise borrowing limit to state

Telangana has been seeking relaxation of 3 per cent borrowing limit imposed by FRBM Act, claiming it needs more funds for its higher plan outlays

Telangana chief minister K Chandrasekhar Rao today requested Union Finance Minister Arun Jaitley to increase the borrowing limit for Telangana to 3.5 per cent of the state GDP. Rao met with Jaitley among other ministers during his visit to Delhi today.

The state government has been seeking relaxation of the three per cent borrowing limit imposed on states by the FRBM (Financial Responsibility and Business Management) Act for quite some time, stating that it needs more funds to take care of higher plan outlays.

The chief minister said the 14th Finance Commission has recommended that states which are showing revenue surplus can be permitted to access market borrowings at the rate of 3.5 per cent of the state GDP.

 

"May I reiterate my request to accordingly increase the FRBM limit to Telangana state to 3.5 per cent as the state satisfies all the criteria laid down by the Finance Commission,"Rao said in his letter.

He also requested the Union Finance Minister to grant exemption to the Hyderabad Urban Development Authority (HMDA) for the purpose of assessing income tax on its revenues, as the agency was only engaged in the urban development activities.