State Government Raises ₹10,000 Crore via Market Borrowings to Fund Rythu Bharosa Payouts

The state government has raised ₹10,000 crore through market borrowings since last May to meet its immediate financial commitments, primarily to fund the Rythu Bharosa scheme. The amount was raised in instalments of ₹2,000 crore and ₹4,000 crore twice, as the June 30 deadline approaches for crediting ₹6,000 per acre to over 1.35 crore acres under the scheme.

In April, the government had raised ₹11,413 crore, but borrowings in May saw a reduction of ₹871 crore, reportedly due to deductions of interest on ways and means advances availed by the government. With a requirement exceeding ₹9,000 crore, the government has kept open the option of borrowing more through auctions of securities conducted by the Reserve Bank of India later this month.

The move comes amid criticism from opposition parties and some farmers over delays in crediting amounts during the Yasangi (rabi) season. Allegations surfaced that the Rythu Bharosa benefit was limited to farmers owning two acres or less during that season, prompting the government to affirm its commitment to credit eligible farmers within 10 days from June 30.

The government faces challenges in raising finances, with tax revenue at ₹26,093 crore by the end of May. This was largely driven by healthy growth in Goods and Services Tax (GST), which reached ₹9,691 crore, with over ₹6,000 crore collected in May alone. Sales tax revenue also rose from ₹2,923 crore at April end to ₹6,088 crore at the end of May.

Expenditure, however, remains high. Interest payments accounted for ₹4,658 crore, salaries and wages ₹8,324 crore, pensions ₹4,758 crore, and subsidies — primarily reimbursement for free power to the farm sector — ₹5,809 crore. With forecasts of a below-normal monsoon and other factors, the government is likely to face difficulties in balancing welfare and developmental projects.