According to the Reserve Bank of India (RBI)’s report on state finances, Telangana’s debt has gone up by 9.5% in the past financial year. At the same time, the state has increased its debt to 22.2% of its Gross State Domestic Product (GSDP) in the Financial Year (FY) 2017-18 as against the 12.7% in the Finacial Year 2016-17.
An increase in the debt ratio in GSDP is an indicator of inefficient fiscal management. Earlier, CAG reports on Telangana have often pointed out the poor financial management in the state. Moreover, Non-development expenditure was 3.4 % in the Financial year 2016-17, it touched 35.2 % in the financial year 2017-18 which is alarming.
Interestingly, the RBI Report of Andhra Pradesh which had suffered financial loses after the bifurcation, has managed to bring down their debt from 36.4% of GSDP in 2016-17 to 27.3% in 2017-18. Telangana Chief Minister K Chandrasekhara Rao has to do a lot of explaining for this financial mess.
