5 months on, KCR slashes his state budget by 20 percent amid slowdown worries
The Telangana Rashtra Samithi returned to power for a second successive term in December 2018, but the chief minister presented only a vote-on-account budget in February this year on the ground that there was no clarity on devolution of funds from the Centre in view of the Lok Sabha elections.Updated: Sep 09, 2019, 21:12 IST
Five months after the commencement of the 2019-20 financial year, Telangana chief minister K Chandrasekhar Rao on Monday presented the full-fledged budget for the year with an outlay of Rs 1.46 lakh crore and a revenue surplus of Rs 2,044 crore.
The Telangana Rashtra Samithi returned to power for a second successive term in December 2018, but the chief minister presented only a vote-on-account budget in February this year on the ground that there was no clarity on devolution of funds from the Centre in view of the Lok Sabha elections.
Presenting the full-fledged budget for the rest of the financial year, the Telagnana chief minister pegged a revenue expenditure of Rs 1,11,055.85 crore and a capital expenditure of Rs 17,274 crore, which is nearly 19.5 per cent less than the vote-on-account budget presented in February, when the outlay was projected as 1.82 lakh crore.
The fiscal deficit of the state has been projected to be Rs 24,081.74 crore and revenue surplus to be Rs 2,044.08 crore.
KCR attributed the slashing of the budget to the overall economic slowdown in the country, which had its effect on Telangana as well. “I regret that I am presenting the state budget when both the Centre and state are going through a severe financial crisis. The severe economic slowdown is leading to serious repercussions in the country and has adversely impacted all sectors. There is negative growth in many key sectors,” he said.
He pointed out that Telangana had achieved only 5.46 growth rate in revenues for the first quarter of 2019-20, though it was anticipating 15 per cent compounded annual growth rate. The growth rate in revenues from commercial taxes was only 6.61 per cent, from excise 2.59 per cent, 17.5 per cent in stamps and registration, till last financial year and -2.06 per cent in motor vehicle tax (as per cent 19 per cent last year).
“The non-tax revenues, too, recorded a steep decline by 29 per cent purely due to the economic slowdown. Added to this, the Centre also made a cut in the devolution of funds to the state. For 2019-20 financial year, the Centre has cut 4.19 per cent in the state’s share in Central taxes. The Centre also reduced allocations in several other items causing severe loss to the state,” he said.
The chief minister, however, said Telangana was slightly better placed in economic growth when compared to other states like Punjab, Karnataka and Haryana which had registered a minus growth rate. “Because of the leverage the state has due to its economic growth and fiscal discipline, it could raise funds from other financial institutions,” he said.
KCR said all the flagship programmes of the state government including construction of irrigation projects like Kaleshwaram, Palamurur-Rangareddy, Sitarama and Devadula would continue without any interruptions.
“We are committed to continue welfare programmes for the poor people and farmers despite the existing financial crisis. We have doubled the amounts being given for pensions to various sections of people, increased the financial assistance under the Rythu Bandhu Scheme from Rs 8,000 per acre to Rs 10,000 per acre per annum by making a budgetary allocation of Rs 12,000 crore,” he said.
Similarly, schemes like Rythu Beema, waiver of crop loans for farmers, free power supply to agriculture, KCR Kits, Kalyana Lakshmi, Arogya Lakshmi, 6 kg rice for each family and others will continue, he said.
The chief minister said the Centre had not given any extra rupee to the state in the last five years, except under devolution of tax shares to the tune of Rs 2,72,926 crore and Rs 31,802 crore for implementation of central schemes. “Though, the Centre has to give grant of Rs 450 crore for development of backward areas under AP Reorganisation Act, it has not given any money,” he criticised.