The burden of loans on the State government is mounting even as the State is set to exhaust the borrowings limit prescribed by the Union Finance Ministry soon.The State government, in the budget estimates for the fiscal 2025-26, projected borrowings at ₹64,539 crore. However, the Union Finance Ministry had subsequently reduced the figure and set the eligibility of borrowing ₹54,009 crore during the fiscal in accordance with the provisions of the Fiscal Responsibility and Budget Management Act. The government raised borrowings of around ₹46,000 crore by September 23 leaving a balance of around ₹8,000 crore for the fiscal.The spree of raising funds through auction of securities conducted by the Reserve Bank of India can be seen from the fact that Telangana mobilised ₹12,000 crore during September alone with one more auction to go, including ₹5,000 crore raised on Tuesday (September 23). Borrowings and other liabilities till August end were ₹33,415 crore according to the figures audited by the Comptroller and Auditor General of India. This takes the total borrowings at the end of the first half of the current fiscal to around ₹46,000 crore.A major chunk of the borrowings are reportedly being utilised to restructure the high interest loans obtained by the previous government with long tenure low interest loans. This can be seen from the interest rate of 7.44% for the ₹5,000 crore raised on Tuesday with tenure of over 20 years.The Central government is learnt to have given its nod for restructuring the loans as the move would save interest burden of few thousands of crores to the State exchequer. This follows Finance principal secretary Sandeep Kumar Sultania’s discussions with the Union Finance Ministry explaining the State’s position to the Centre and seeking its cooperation in fulfilling the commitments of the government.Senior officials are however confident that the State will get more than what has been prescribed at the beginning of the financial year. “We will get more,” was how a senior Finance department official responded when asked about the limit set for borrowings by the State.The official told The Hindu that the government has initiated the process of restructuring loans and the State is likely to see the benefits of the exercise soon. Published - September 24, 2025 06:21 pm IST