Telangana's Significant Debt Auction: A Closer Look at State Fiscal Health
Telangana raised Rs 6,000 crore through a government securities auction handled by RBI. The securities, issued at tenors between 26-38 years with interest rates from 7.72%-7.4%, increased the state's debt to over 50% of its budgeted estimate. Despite a projected revenue surplus, Telangana registered a deficit by July.
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- India
In a notable move, Telangana successfully raised Rs 6,000 crore through the sale of state government securities, announced the Reserve Bank of India (RBI). The debt issuance was executed in four tranches of Rs 1,500 crore each, with varying tenors ranging from 26 to 38 years and interest rates between 7.72% and 7.4%.
The state's total borrowings till July 31 amounted to Rs 24,669.88 crore as opposed to the projected Rs 54,000 crore, exceeding 50% of the budgeted debt for the financial year. Telangana's fiscal strategy, despite anticipating a revenue surplus of Rs 2,738.33 crore for the 2025-26 budget, is facing challenges as it recorded a substantial deficit of Rs 12,564.77 crore by the end of July.
The projected fiscal deficit of Rs 54,009.74 crore for FY26 was contrasted by the recorded deficit of Rs 24,669.88 crore by July-end, calling into question the state's fiscal strategies and future debt management.
(With inputs from agencies.)
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