State government appears to be comfortably placed to meet targets of Rythu Bandhu
The State government appears to be comfortably placed in so far as crediting of amounts of ₹5,000 an acre into the accounts of little over 59 lakh farmers as part of the next instalment of its flagship Rythu Bandhu, the farmers’ investment support scheme.
The government earmarked ₹12,000 crore for Rythu Bandhu in the current budget and released the first instalment of the Rythu Bandhu of over ₹ 6,000 crore during the current fiscal in June second week. There was uncertainty over the crediting of the second instalment in view of the precarious financial situation in the aftermath of the novel Coronavirus (Covid-19) which resulted in significant drop in revenues.
The government subsequently accepted the Option-1 offered by the Central government under the Atmanirbhar Abhiyan to meet the estimated shortfall in the revenue on account of implementation of the GST. The State became eligible for receiving funds to the tune of ₹ 2,380 crore under the scheme according to which the Centre set up special borrowing window for raising loans to meet the shortfall on behalf of States and Union Territories.
Accordingly, the State received the second instalment of GST compensation shortfall amounting to ₹ 688 crore on Monday. The first instalment of ₹ 559 crore under the special borrowing window set up by the Central government was released on December 14. The release was the eighth instalment and the balance ₹1,133 crore is likely to be received in the next couple of weeks. The special window is in addition to the facility given to the State to raise ₹5,017 crore through open market borrowings. Simultaneously, the government opted for open market borrowings in the form of State Development Loans and started participating in the RBI auctions. The government has raised ₹ 6,000 crore so far in the form of SDLs starting during the four auctions conducted by the RBI starting December 1. The government had in fact notified SDLs to the tune of ₹4,500 crore, but availed additional borrowing of another ₹1,500 crore through the Green Shoe option. The Green Shoe option, according to official sources, enables the government to take more amount than that is put to auction and this indicates the investors’ interest in these securities.
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