Telangana CM Reddy acknowledges debt burden, says state borrowed Rs 4,000 crore RBI loan to pay salaries

Noting that the government belongs to the employees, he said he would place all the facts and figures with regard to the financial situation before them so that they can give their views on payments.

Hyderabad: Telangana Chief Minister A Revanth Reddy on Monday admitted the state's severe financial crisis, revealing challenges in meeting basic government obligations such as employee salaries. During a discussion on Dearness Allowances (DA) in the Legislative Council, he disclosed that the state is borrowing Rs 4,000 crore monthly from the Reserve Bank of India to ensure timely salary payments on the first day of each month. Given these financial limitations, he asked government employees to prioritize between receiving regular salaries or dearness allowances.

This candid admission comes as Revanth Reddy's administration faces mounting criticism for failing to implement key promises from the Congress party's six guarantees announced during the 2023 assembly elections, with financial constraints hampering their execution.

"The government is struggling to pay salaries to employees on the first of every month due to the state's weak financial position. We're taking a hand loan of Rs 4,000 crore from RBI every month to pay salaries on day one," the Chief Minister explained in the Council. "This government is yours. I will disclose all accounts to you. You decide what should be given or put on hold. While DA is a legitimate employee demand, I request understanding given our current difficult financial situation."

Two days earlier at a public meeting in Station Ghanpur, he attributed the financial crisis to the previous BRS administration, claiming it had burdened the state with Rs 8.29 lakh crore in debt over the past decade. "We must pay Rs 1.3 lakh crore in interest and outstanding amounts. Had such a substantial sum been saved, the government could have built houses for everyone and waived farm loans for another 70 lakh people," he said.

Defending his government's accomplishments despite fiscal challenges, he highlighted "150 crore women in the state have used free RTC bus travel, with the government paying Rs 5,005 crore for this programme. We've supplied 200 units of free power to 50 lakh families, waived Rs 20,610 crore in farm loans, and recruited 57,946 government employees."

The Chief Minister emphasized that while Telangana was handed over as a surplus state when formed, it faced bankruptcy after ten years under previous BRS leadership. He assured citizens that his government is making every effort to implement promised welfare schemes despite the financial difficulties inherited from the previous administration.