Telangana CM urges centre to hike cap on borrowings

New Delhi/Hyderabad, Oct 27 (IANS) Telangana on Tuesday urged the central government to raise the cap prescribed by Fiscal Responsibility and Budget Management (FRBM) Act for raising loans.

Chief Minister K. Chandrasekhar Rao met Union Finance Minister Arun Jaitley in New Delhi and requested him to relax the FRBM norms.

The chief minister in a memorandum submitted to Jaitley referred to 14th Finance Commission recommendation that the states which are showing revenue surplus can be permitted to access market borrowings at 3.5 percent of the state GDP by raising ceilings of 3 percent as per present FRBM criteria.

KCR, as the chief minister is popularly known, urged Jaitley to increase the FRBM limit for Telangana to 3.5 percent as the state satisfies all the criteria laid down by the Finance Commission.

The chief minister also discussed the issues of the central government’s help for the state’s development and allocation of funds under various central schemes.

Jaitley told reporters after the meeting that the chief minister made certain suggestions with regard to raising resources for the state and methodologies for the same.

“He wants the FRBM’s limit for the state to be raised. He gave documents in support of that. Expenditure department will consider the feasibility,” he said.

The chief minister also urged the central government to exempt urban development bodies from income tax. In another memorandum submitted to the finance minister, he said the additional commissioner of income tax had rejected the state’s request to exempt Hyderabad Metropolitan Development Authority (HMDA) from income tax.

KCR said that the income generated by the urban authority is meant for public purpose and there is no private purpose or profit motive involved in it. The state’s representative in the national capital Venugopala Chary said KCR reiterated the requests made earlier.

KCR also sought the central government’s help for drought relief and more allocation of funds for Mission Kakatiya and Jalaharam, the flagship programmes of the state government for development of irrigation and drinking water supply.

He also called for more funds for the development of backward districts of the state.

KCR later attended a meeting of the sub-committee of Niti Aayog (National Institution for Transforming India) on devolution of funds to states and centrally sponsored schemes.

KCR had earlier urged Niti Aayog to relax the FRBM norms so that the state could borrow more loans for taking up development schemes.

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