NAVEENA GHANATE
Hyderabad
The Centre dashed the hopes of the Telangana government to make TS a welfare state by imposing cuts throughout the year. A substantial part of the income expected in the budget did not materialise and this led to a shortage in government funds.
The FRBM cuts imposed midway by the Centre, the absence of grant-in-aid, and the inability to raise revenue through land sales, led to a shortage of around Rs 50,000 crore compared to budget estimates.
While Telangana planned to borrow Rs 53,970 crore from the open market, due to the limitations placed by the Centre it could only raise Rs 40,150 crore. In the first quarter, the RBI didn’t allow Telangana to go for open market borrowings. Chief Minister K. Chandrasekhar Rao had to request the Centre to lift the curbs.
The Centre released only around 35 per cent of the expected grants-in-aid, that is, only Rs 14,000 crore instead of the expected Rs 41,000 crore. A major chunk of the budget’s income estimates couldn’t be raised due to the Centre’s sanctions.
Due to this, the size of the budget had to be reduced to Rs 1,950 billion from Rs 2,450 billion. Some of the schemes like Dalit Bandhu, promoting oil palm cultivation, developing the tourism circuit, Rs 3 lakh assistance to those who have land and crop loan waivers couldn’t be executed due to these cuts.
Telangana also suffered a shortfall of Rs 7,000 crore which it was hoping to get through land sales.
Describing this as political vendetta Industries Minister KT Rama Rao said, “The Centre has imposed financial sanctions on us as if we are an enemy country. Rs 30,000 crore was cut for refusing to fit meters on agricultural motors. The financial year started with certain budgetary expectations. The Centre included loans taken through corporations in FRBM limits. Will anyone change rules after the game has started? In the middle of the fiscal, the Centre cut Rs 20,000 crore and introduced new rules as politically we do not see eye to eye with them. They don’t want to give bills to sarpanches. As per the 15th Finance Commission, we should get an entitlement in PR&RD. We got the first instalment but the Centre is not giving us the remaining.”
“Due to the covid-19 pandemic, Telangana suffered a loss of Rs 1,000 billion. The Centre has been harassing us as is evident from the reports coming in daily.
Even for threshing platforms for which Rs 190 crore was spent they stopped money. In Gujarat, they build threshing platforms even for fish but in Telangana we cannot build one for maize and paddy. The TS government had to pay Rs 192 crore and bear the expenses,” KTR added.
In FY23, Telangana and 11 other big states borrowed Rs 7.6 trillion below the budgeted Rs 9.1 trillion as per a report by ICICI Securities. Telangana is among the 12 large Indian states which was forecast to witness aggressive spending growth in 2023-24.
“While the latest budgets are factoring in aggressive spending growth in the coming year (2023-24), it must be borne in mind that states have generally failed to achieve their spending targets in recent years,” I-SEC PD economists Tadit Kundi, A. Prasanna and Abhishek Upadhyay said.
