Hyderabad: The World Bank, in its report ‘A Study of Off-Budget Borrowings in India for the 16th Finance Commission’, has flagged inconsistencies in the reporting of off-budget borrowings by state govts, pointing to discrepancies in Telangana’s disclosures.Telangana’s outstanding off-budget borrowing liabilities stood at ₹1,20,944 crore at the end of 2023-24, accounting for around 9% of its gross state domestic product (GSDP) of ₹13,61,395 crore. The state raised ₹2,303 crore in off-budget borrowings during 2023-24.The report pointed out that six Telangana state entities, which had earlier reported borrowings on behalf of the govt, showed nil off-budget liabilities in 2022. This was despite govt guarantees worth ₹35,667 crore and direct govt loans of ₹3,916 crore being provided for debt servicing. The CAG adopted the latest available figure of ₹32,351 crore as Telangana’s reported off-budget borrowings.It also highlighted discrepancies in reporting by 12 state public sector enterprises (SPSEs) in 2020. Their borrowings stood at ₹85,380 crore, while outstanding govt guarantees were ₹70,688 crore. However, only the lower guarantee figure was considered as off-budget borrowing.Telangana’s outstanding off-budget liabilities rose from ₹97,940 crore in 2020-21 to ₹1,18,955 crore in 2021-22. They stood at ₹1,18,629 crore in 2022-23 before increasing to ₹1,20,944 crore in 2023-24.Andhra Pradesh reported higher outstanding off-budget liabilities of ₹1,40,470 crore, equivalent to 11% of its GSDP of ₹12,91,518 crore. AP and Telangana thus had the highest liabilities among the states covered in the report. Kerala reported ₹32,942 crore, or 3% of its GSDP, while Karnataka had ₹13,478 crore, equivalent to 1%. Maharashtra’s liabilities stood at ₹10,135 crore. These figures relate to the end of 2023-24.The report examines off-budget borrowings by state govts, their scale, different forms, and associated fiscal risks. Such borrowings are raised through state-owned entities and special-purpose vehicles, with repayment supported by govt grants, guarantees, or future revenues.It recommends a standardised annual disclosure system, preferably as part of state budgets, with entity-wise details of outstanding borrowings, fresh loans, repayments, interest payments, and govt assistance for debt servicing. It has also recommended that the CAG incorporate these disclosures into the State Finance Accounts to improve transparency and accountability.
