Telangana to raise ₹21,000 crore through market loans to fund Rythu Bharosa

The Telangana state government is set to raise ₹21,000 crore through open market borrowings in the second quarter of the 2026-27 financial year to fund the Rythu Bharosa scheme for farmers. Based in Hyderabad, the state administration will launch the borrowing programme on July 1 with a first tranche of ₹7,000 crore. This decision follows the complete exhaustion of the state's first-quarter borrowing limit of ₹18,900 crore.

The Reserve Bank of India (RBI) will conduct the auction of State Development Loans (SDLs) to raise these funds. The capital mobilised through this program will directly support the Rythu Bharosa scheme. Chief Minister A. Revanth Reddy is scheduled to formally announce the release of these welfare funds at a public meeting in Khammam on June 30, with the benefits expected to be credited to the bank accounts of farmers in the first week of July.

The state government had already exhausted its entire first-quarter borrowing limit of ₹18,900 crore, which was earmarked for the April-to-June period. The final portion of these funds was raised by June 16, which prompted the state to submit a fresh borrowing indent to the RBI for the upcoming quarter.

According to the official borrowing calendar, the government will raise the ₹21,000 crore in multiple tranches between July and September. Following the initial ₹7,000 crore auction on July 1, the state plans to raise ₹3,500 crore on July 15 and ₹1,000 crore on July 29.

In August, the state will secure ₹2,500 crore on August 12 and ₹2,000 crore on August 27. The final rounds of the quarter will see ₹2,500 crore raised on September 9 and another ₹2,500 crore on September 23.

With these upcoming loans, Telangana's total open market borrowings for the first half of the 2026-27 fiscal year will reach ₹39,900 crore. This represents more than half of the ₹73,383 crore that the state government proposed to raise through borrowings for the entire financial year. A balance of ₹33,483 crore will remain for the final two quarters between October and March.

In addition to the fresh borrowings, the state government is planning to restructure nearly ₹25,000 crore of legacy loans taken during the previous BRS administration. These older loans carry higher interest rates and shorter repayment tenures. The government aims to swap them with new loans featuring lower interest rates and longer repayment periods to ease the pressure on the state treasury, subject to approval from the Central government.