Daijiworld Media Network - Bengaluru (SP)

Bengaluru, May 21: The state government, which is under pressure to wriggle out of the vicious grip of coronavirus-related lockdown and infection, and to accelerate the growth of the state, plans to go for big borrowing. When presenting the budget, the chief minister had indicated that the government plans to raise loan of Rs 52,919 crore during the year 2020-21. Now, it wants to use the offer made by the centre and borrow about Rs 15,000 crore additionally.

With this, the state will be burdened with a loan of over Rs 68,000 crore in one fiscal, and there is proposal to amend Karnataka Fiscal Responsibility Act 2002 to make this possible. In this connection, Yediyurappa, who also holds finance portfolio, met finance department's additional chief secretary I S N Prasad, and held meeting in which the officials was asked to prepare proposals to raise loans from banks like JICA, Hudco etc and to send proposal to amend the Act for this purpose.

B S Yediyurappa

The state, as per the new norm of the central government that has increased the quantum of loan that can be raised by states from 3 percent of GDP of the state to 5 percent, is now eligible to raise about Rs 90.000 crore loan. The state government feels that raising loans is the only available option before it at this juncture as most of the income sources of the state have dried up and apart from below par revenue from many departments, it has to foot heavy unproductive expenditure.

Additional chief secretary I S N Prasad, said that the process may take some time as amendment to the act is necessary before raising additional loan.