<p>The debts of the state, already starved of funds, are set to grow as the government is looking to raise an additional Rs 15,000 crore from the market.</p>.<p>This, after the Centre raised the borrowing limit of states from 3% to 5% of the gross state domestic product (GSDP).</p>.<p>At 3% of GSDP, Karnataka is eligible to borrow around Rs 50,000 crore from the market, and the Rs 15,000 crore will be in addition to this.</p>.<p>Chief Minister B S Yediyurappa has directed officials to explore various options for the borrowing that will be used to finance various expenses of the government, even as its revenues trickled for the second consecutive month due to the lockdown.</p>.<p>Finance Department officials confirmed the proposal, adding that it will be explored after the existing limit of around Rs 50,000 crore is utilised.</p>.<p>According to sources, discussion on borrowing the amount was held recently after Finance Minister Nirmala Sitharaman raised the borrowing limit for states in the fifth tranche of the economic stimulus package.</p>.<p>The decision came after indications that the state’s revenue sources will remain affected for a considerable duration, affecting its ability to maintain expenditure incurred in paying salaries and funding essential works in the financial year.</p>.<p>The additional Rs 15,000 crore will peg the state’s borrowings from the market at around Rs 65,000-66,000 crore, which is 3.82-3.88% of the GSDP worth Rs 16,98,685 crore.</p>.<p>According to the state budget, total liabilities at the end of 2020-21 fiscal is projected at Rs 3.68 lakh crore, which is expected to change due to the coronavirus-induced economic slowdown.</p>.<p>Even with the additional borrowings, liabilities of the state are expected to remain within the limit of 25% of GSDP as mandated in the Karnataka Fiscal Responsibility Act. The total liabilities at the end of 2019-20 were Rs 3.27 lakh crore.</p>.<p>It can be recalled that the government has been wary of borrowing additional funds from the markets due to high interest rates, which will bite into the government’s subsequent budgets.</p>.<p>When contacted, Additional Chief Secretary (Finance) I S N Prasad sai d that though there was a proposal, the government was yet to take a final call on the same. “First we need to use our existing limits. We will decide later,” he said.</p>
<p>The debts of the state, already starved of funds, are set to grow as the government is looking to raise an additional Rs 15,000 crore from the market.</p>.<p>This, after the Centre raised the borrowing limit of states from 3% to 5% of the gross state domestic product (GSDP).</p>.<p>At 3% of GSDP, Karnataka is eligible to borrow around Rs 50,000 crore from the market, and the Rs 15,000 crore will be in addition to this.</p>.<p>Chief Minister B S Yediyurappa has directed officials to explore various options for the borrowing that will be used to finance various expenses of the government, even as its revenues trickled for the second consecutive month due to the lockdown.</p>.<p>Finance Department officials confirmed the proposal, adding that it will be explored after the existing limit of around Rs 50,000 crore is utilised.</p>.<p>According to sources, discussion on borrowing the amount was held recently after Finance Minister Nirmala Sitharaman raised the borrowing limit for states in the fifth tranche of the economic stimulus package.</p>.<p>The decision came after indications that the state’s revenue sources will remain affected for a considerable duration, affecting its ability to maintain expenditure incurred in paying salaries and funding essential works in the financial year.</p>.<p>The additional Rs 15,000 crore will peg the state’s borrowings from the market at around Rs 65,000-66,000 crore, which is 3.82-3.88% of the GSDP worth Rs 16,98,685 crore.</p>.<p>According to the state budget, total liabilities at the end of 2020-21 fiscal is projected at Rs 3.68 lakh crore, which is expected to change due to the coronavirus-induced economic slowdown.</p>.<p>Even with the additional borrowings, liabilities of the state are expected to remain within the limit of 25% of GSDP as mandated in the Karnataka Fiscal Responsibility Act. The total liabilities at the end of 2019-20 were Rs 3.27 lakh crore.</p>.<p>It can be recalled that the government has been wary of borrowing additional funds from the markets due to high interest rates, which will bite into the government’s subsequent budgets.</p>.<p>When contacted, Additional Chief Secretary (Finance) I S N Prasad sai d that though there was a proposal, the government was yet to take a final call on the same. “First we need to use our existing limits. We will decide later,” he said.</p>
