Centre bars state fund-raiser again


Hyderabad: The stage government’s hopes to raise funds through auction of bonds were dashed this week too. The Centre has permitted the RBI to conduct auction of bonds for only Andhra Pradesh, Maharashtra and Rajasthan for this week on May 17.

The government expects to get approval for the next auction scheduled on May 24. The delay in furnishing replies by the government to the queries raised by the Centre on May 9 is said to be the reason for Telangana bonds not figuring in the list. The RBI issued notification to auction AP bonds to raise Rs 2,000 crore, Maharashtra Rs 5,000 crore and Rajasthan bonds to raise Rs 1,500 crore.


The Union finance ministry halted auction of Telangana bonds in the new financial year raising queries on the bank guarantees given to corporations to raise loans. It informed the government that it would consider these bank guarantees as part of FRBM limit. The state government is strongly opposing this, arguing that the loans raised through corporations were spent on creating assets and capital expenditure on such projects should be treated as debt.

The Union finance secretary on May 9 held a video conference where Telangana finance secretary K. Ramakrishna Rao, lodged a strong protest and demanded that the Centre allow auction of bonds at the earliest stating that halting it had hit government’s welfare schemes.


The union finance secretary sought more details on bank guarantees which the state government is expected to send in a day or two. The state government hopes to get approval for the auction of bonds in the next round scheduled on May 24.

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