E-Paper
Telangana’s debt rose 10 times under BRS to ₹6.71 L cr: Cong
Senior BRS legislator and former state finance minister T Harish Rao, however, described the white paper as a “bundle of white lies” prepared with an intention of political vengeance
The newly formed Congress government in Telangana on Wednesday presented a grim picture of the state’s financial position with the total debt mounting almost 10 times in the last 10 years during the previous Bharat Rashtra Samithi government led by former chief minister K Chandrasekhar Rao.
A white paper on the state’s financial position was tabled by finance minister Mallu Bhatti Vikramarka in the assembly on Wednesday. He said the total debt of the state government, including the loans raised through launch of special purpose vehicles, had gone up from ₹72,658 crore in 2014-15 to ₹671,757 crore.
“This gigantic increase in the debt (almost 10 times) has created an enormous fiscal stress on the state’s finances in terms of its ability to service the debt. No tangible fiscal assets in proportion to the money spent were created in the past 10 years,” he said.
The debt servicing burden on the budget and off-budget borrowings in the last 10 years is consuming 34% of the state’s revenue receipts. Further, the salaries and pensions of employees consume another 35% of the state’s revenue receipts, Vikramarka said.
Senior BRS legislator and former state finance minister T Harish Rao, however, described the white paper as a “bundle of white lies” prepared with an intention of political vengeance. “It is a blatant lie that the previous government had not created any tangible assets in tune with the borrowings, only to project that it had not done anything. It appears the Congress government is trying to escape from its responsibility of implementing its six guarantees by showing a grim picture of state finances,” he alleged.
The finance minister said there was a gap of almost 20% between the budgeted and the actual expenditure in the last nine years. The budget estimates grew from ₹100,638 crore in 2014-15 to ₹256,859 crore in 2022-23. “But the actual expenditure was ₹62,306 crore in 2014-15 and it went up to ₹204,085 crore in 2022-23. In the period between 2014-23, on average, Telangana actually spent only 82.3% of the budgeted expenditure,” he said.
This figure is not only high when compared to other states, but also in comparison to the expenditure achieved in the united Andhra Pradesh. “This gap in expenditure between the budget and actuals has meant that there is an accumulation of committed expenditure in terms of payments made for the services rendered by the suppliers and contractors and also to the employees,” he said.
This committed expenditure has meant that very little fiscal space is available for undertaking any welfare measures for the poorer sections of the society and growth enhancement measures for the development of the economy.
Further, there is a huge gap between the budgeted and actual money spent on major welfare schemes, such as Dalita Bandhu and other programmes aimed at the welfare of ST, BC and minorities, he said.
Due to the increased fiscal stress, the state has to depend upon the ways and means advances from the RBI on a daily basis. From a situation where the state had positive balances for all the 100% of the days in 2014 to a situation where the state has positive balances in less than 10% of the days, shows the enormous fiscal stress.
Consequently, the state has not been able to spend enough money on critical sectors, such as education and health, where the budgeted amount as the proportion of the total expenditure is among the lowest in the country.
The finance minister said since formation of Telangana, the government had entered into 39,175 work agreements of 24 departments amounting to ₹349,843 crore, for which ₹1,89,903 crore expenditure was already incurred by December 4, 2023 and a balance amount of ₹159,940 crore is yet to be spent.
“The state government has to make budgetary provision of ₹86,957 crore in the coming financial years for the balance works. Further, an amount of ₹72,983 crore will have to be borrowed from the various financial institutions. Overall, this will add to the debt servicing burden of the state,” he said.
He pointed out that the state government, as of December 19, will have to clear 478,168 bills amounting to ₹40,154 crore payable to the employees/ contractors/ suppliers and others.
“A careful analysis of the above facts shows that Telangana state which was a revenue surplus state in 2014 and has one of the fastest growing economies in the country is now staring at a debt crisis. The rate of accumulation of the debt from off-budget borrowings has led to this situation,” he said.
Every effort will be made to increase the state’s resources and direct expenditures toward uplifting the impoverished, while reducing unnecessary spending. The new government is determined to implement all the six guarantees which are promised by the party based on which the people of Telangana had given the mandate for change, the minister said.
BRS presents counter white paper
The BRS legislature party sought the permission of Speaker G Prasad Kumar to make its own power-point presentation in the assembly to put the records straight but the Speaker said there was no such provision.
As a result, the BRS leaders released the copy of the presentation to the media, stating that the previous K Chandrasekhar Rao government had created huge assets in the last 10 years.
The presentation presents in detail the development and assets of the KCR government, right from the power sector, to infrastructure, economy, agriculture and so on.
The reforms in the power sector, which enabled the state to reach the top in per capita power consumption, and the multiple initiatives in other sectors which saw it reaching the top in the country again in per capita income as well, have been detailed in the document.
The presentation, which compares the situation in 2014 and 2023, also details the growth in GSDP, sales tax, registration income, the development in infrastructure including the new roads laid and the decentralisation of the state’s districts from 10 to 33.
It also pointed out how the BRS government took up construction of the integrated district offices complexes in 30 districts so far at a cost of ₹1,649.62 crore and increased the number of municipalities from 52 to 128 and so on, to mention a few.
The BRS said after the formation of Telangana, the assets of the state had increased by 159%. “For every ₹1 loan borrowed by the BRS government, there was creation of assets worth ₹1,000,” the white paper said.
Similarly, the per capita income of the Telangana shot up by 151%, tax collections by 161% and revenue from stamps and registrations by 406%. The production of crops increased multi-fold – paddy by 150% and cotton by 50%. “The area under cultivation went up by 50 percent compared to 2014,” the BRS white paper said.
