The State government has raised ₹10,000 crore market borrowings since last May to fulfil its immediate financial commitments.

The government has raised the amount in instalments of ₹2,000 crore and ₹4,000 crore twice, as the June 30 deadline for crediting ₹6,000 per acre for over 1.35 crore acres under Rythu Bharosa is fast approaching. Interestingly, the government raised ₹11,413 crore in April, and borrowings were down by ₹871 crore in May, reportedly on account of the deduction of interest on ways and means advances availed by the government.

Needing in excess of ₹9,000 crore, the government has kept options for borrowing more through the auction of securities conducted by the Reserve Bank of India towards the end of the month. This assumes significance as the government drew flak from the opposition parties and a section of farmers due to delays in crediting of the amounts during the Yasangi (rabi season). There were allegations that Rythu Bharosa benefit was confined to farmers owning two acres or less during the Ysangi (Rabi) season, prompting the government to firm up its resolve to credit the amount into the accounts of eligible farmers within 10 days from June 30.

The government is already facing a tough time in raising finances as the situation was not so encouraging during the first two months of the fiscal. Tax revenue was ₹26,093 crore at the end of May largely driven by healthy growth in the Goods and Services Tax, which reached ₹9,691 crore, marking a collection of over ₹6,000 crore during May alone, while revenue through Sales Tax too has risen impressively from ₹2,923 crore at April end to ₹6,088 crore at the end of May.

Expenditure was however, on the higher side with interest payments taking ₹4,658 crore, salaries/wages (₹8,324 crore), pensions (₹4,758 crore) and subsidy, primarily reimbursement towards free power to the farm sector (₹5,809 crore). Given the forecast of below normal monsoon and other factors, the government is likely to face a tough time in raising finances to strike a balance between welfare and developmental projects currently under way in the State.