TG depended on financial accommodation instruments for most part of 2024-25

The Telangana government relied on the financial accommodation instruments provided by the Reserve Bank of India for its financial needs for most part of the financial year 2024-25.

The precarious situation of the finances can be seen from the fact that the State government maintained minimum cash balance of ₹1.38 crore required with the RBI for just two days in the entire fiscal without utilising the financial accommodation instruments. Under agreement with the RBI, the government should maintain minimum cash balance with the bank and if the balance falls below the agreed minimum on any day, the deficiency is made good by availing special drawing facility, ways and means advances and overdraft.

According to the Finance Accounts for 2024-25 audited by the Comptroller and Auditor General of India tabled in the legislative assembly, the government maintained minimum balance through special drawing facility alone for 65 days of the year. The Ways and Means Advances helped the government sustain the balance for almost half the year, 175 days, on which it had maintained minimum balance after exhausting the provision of special drawing facility.

The government relied on overdraft for 123 days one third of the year after exhausting SDF and WMA during the fiscal indicating, what officials said, the state of cash management after boasting of budget of more than ₹3 lakh crore. The deficit in maintaining the minimum balance arises even after the State government opted for huge loans, including market borrowings to the tune of ₹64,000 crore during the financial year.

The operative limit of SDF for the State was ₹4,966.69 crore and that for the WMA was ₹2,407 crore as of March 31, 2025, but the State exceeded both during the fiscal.