The crucial exercise of preparing and presenting the annual budget reflects the priorities of the government, be it at the Centre or in the States. The Modi-led Bharatiya Janata Party government at the Centre announced a series of measures in the Union Budget for 2023-24 to strengthen the nation’s economy. The measures include specific steps to increase the capital expenditure to augment the nation’s wealth; enhance investments to develop infrastructure as well as amenities in sectors such as railways, transportation, highways and ports. Besides, the Centre had allotted Rs 1 lakh crore loan to the states to encourage them to increase capital expenditure; yet, some of the governments led by regional parties paid no attention to increase the nation’s wealth. Instead, they totally neglected development, while resorting to heavy borrowing amid increasing revenue deficit.
The Governments of West Bengal, Bihar, Andhra Pradesh, Telangana and Tamil Nadu have announced huge investments in their budgets. Mamata Bannerjee presented Rs 3.39-lakh crore budget for this year. However, she resorted to heavy borrowing as such the total borrowings of West Bengal reached Rs 6.48-lakh crore. The per capita debt on each person in the state is put at Rs 59,000. The total borrowings of the West Bengal constituted 37.05% of the GSDP of the state. Not a single industry could be set up during the Mamata regime. The situation in the states of Kerala, Punjab and Bihar is not good. The borrowings crossed 48.5% (Punjab), 37.2% (Kerala) and 38% (Bihar) of the GSDP of the respective states.
The Jaganmohan Reddy government in AP has gone a step further. The AP government is disposing of government properties. As publicity gimmick, the state government claimed that it had allocated huge amounts for investments in the Rs 2.79-lakh crore annual budget. Of the amount, Rs 1.60-lakh crore would be raised by way of external borrowings, central assistance, and the state’s share of taxes devolved by the Centre. The roads in Andhra Pradesh are in a miserable condition because the total allocations made by the Jaganmohan Reddy government, since coming to power, for development of roads and bridges did not exceed 2%. Why would the execution of irrigation projects go slow if the government were to spend funds in tune with the budgetary allocations? What is the reason for the failure of the government to pay salaries to its employees every month on time? People are not going to buy the argument of the state government that it had provided employment to over 6.81 lakh persons. The budget is silent on the total borrowings made by the government in spite of the total borrowings crossing Rs 10 lakh crore. The GSDP of the state was put at 11.47%, in spite of it not crossing 7%. The budget wrongly states that the share of the financial services was 35.41%, while the actual share was limited to 24.2%.
In February last, the KCR government presented a Rs 2.90-lakh crore budget for 2023-24. In Telangana, the difference in budgetary allocations and expenditure would be very high as per the revised estimates. Allocation of Rs 40,000 crore more in this budget, compared to the last year’s budget, does not mean that development in Telangana is notable. Revenue receipts were predicted to be Rs 2.16 lakh crore, though the actual receipts for the last year in this regard had fallen short of projections.
Support to Telangana from the Centre has increased in the form of state’s share of central taxes, grants-in-aid; yet, the revenue deficit has been increasing beyond expectations. The debt servicing burden for the next year would be Rs 22,407 crore. Surprisingly, the Government of Telangana allocated Rs 1,000 crore for publicity, which is 575% more than the allocations made last year. The allocation of funds to this head of account is more compared to the allocations made under Arogyasri. The debt burden in Telangana has crossed Rs 3 lakh crore. During 2014-23, the Centre allocated Rs 1,30,000 crore by way of taxes and Rs 1,39,000 crore by way of grants-in-aid. Under development of basic amenities for railways, the Centre during the current fiscal year allocated Rs 3,048 crore.
The upshot is that the heads of governments led by regional parties are interested in improving their personal net worth rather than developing the state. The Delhi liquor scandal stands as the latest example in this regard.
