Hyderabad, July 1 (PTI) The Telangana government has issued an ordinance to amend an Act, enabling it to go for additional borrowings in view of the COVID-19 pandemic over the set limit of three per cent.
The ordinance was promulgated, on Tuesday, to amend the Telangana fiscal responsibility and budget management Act 2005 (FRBM), for higher borrowings.
'Provided further that for the financial year 2019-20 additional fiscal deficit of Rs.1435 crore shall be permissible over and above 3.25 per cent of the GSDP as a one-time special dispensation.
For the financial year 2020-21 additional fiscal deficit of 2 per cent over and above 3 per cent of the GSDP (up to 5 per cent of the GSDP) shall be permissible,' the ordinance said.
Due to shortfall in the devolution of share of central taxes, the state has been allowed an additional borrowing of Rs 1,435 crore during the last fiscal as one time measure.
There has been an unprecedented impact on the state revenues during the current fiscal also due to COVID-19 pandemic and related lockdown, it said.
The state needs additional revenues to meet the unforeseen expenditures to be spent on relief measures, which may force the government to go for additional borrowings to mop up resources, it added.
The Centre recently allowed states additional borrowings of up to two per cent of the GSDP over and above the normal limit of three per cent (total up to five per cent of the GSDP) during the current fiscal subject to carrying out the necessary amendments to the respective FRBM Acts. PTI GDK ROH ROH