The newly-elected Congress-led State Government in Hyderabad has decided to change the economic policy of the previous BRS government. They want to avoid taking on more loans and relieve the state from its debt burden. The government announced that they will only seek loans within the FRBM limits starting from the new financial year of 2024-2025.
Deputy Chief Minister and State Finance Minister Mallu Bhatti Vikramarka presented the vote-on-account budget for the new financial year. The total outlay of the budget is Rs 2,75,891 crore, which is lower than the previous year’s estimation of Rs 2.9 lakh crore. This decrease in outlay is a result of the government’s decision to limit borrowing and reduce the state’s debt burden.
Official statistics show that the state’s outstanding debt was Rs 72,658 crore in 2014-15, and it has increased to Rs 3.52 lakh crore by FY22-23. The budget estimates for 2024-2025 suggest that the debt will reach Rs 3.86 lakh crore by the end of this financial year. The government aims to address this issue by adopting economic discipline and presenting a realistic budget.
The government officials stated that the previous off-budget debt policy would harm the state’s economy. Therefore, they have decided to abandon the practice of seeking loans liberally through corporations. The budget also indicates a decline in the state’s economic growth rate, with a decrease from 14.7% to 11.3% in the current financial year. The secondary and tertiary sectors of the economy have also shown a decline in their growth rate, except for the manufacturing sector, which registered a growth of 5%.
Considering these factors, the government believes it is necessary to avoid relying on loans to implement schemes and developmental programs. They are committed to managing the state’s finances responsibly and ensuring sustainable economic growth.
