Dwindling revenue forces Telangana to put welfare schemes on the back burner

The Telangana government has slowed down implementation of its social welfare schemes because of dwindling revenue following the Centre’s decision to demonetise Rs 500 and Rs 1,000 banknotes.

The Telangana government has slowed down implementation of its social welfare schemes because of dwindling revenue following the Centre’s decision to demonetise Rs 500 and Rs 1,000 banknotes.

The government is exploring options to mop resources including allowing people to pay taxes, dues, bills in old Rs 500 and Rs 1,000 notes. (AFP)

The decision was taken after chief minister K Chandrasekhar Rao was told on Monday that demonetisation would have a long-term impact on the state’s economy as revenue from registration of properties, excise duty on liquor and taxes on purchase of commodities was falling dramatically.

“We are estimating the monthly revenue loss of around 25-30%,” a senior official of the finance department said. On an average the state collects Rs 4,500 crore every month but the revenue this time may not exceed Rs 3,500 crore ,which would be just sufficient to pay salaries (Rs 2,500 crore) to employees. “As a result, we will have to put all the welfare schemes on hold,” the official said.

The schemes that may get impacted are related to irrigation, giving homes to economically weaker sections, drinking water supply and road connectivity. According to officials, the CM has instructed the finance department to keep payment of all bills in abeyance, except the ones for emergency needs.

The government is also exploring options to mop resources including allowing people to pay taxes, dues, bills in old Rs 500 and Rs 1,000 notes. In case of arrears, no surcharge or penalty will be imposed in case the money is deposited soon.