A fine balance

A commendable feature of Telangana’s economy is that it could achieve a double-digit growth despite the adverse impact of demonetisation.

AuthorPublished: 14th Mar 2017  2:29 amUpdated: 18th Mar 2017  11:32 am

At a time when State budgets are largely seen as ritualistic annual exercises in window-dressing the accounts, the Telangana Budget for 2017-18 reflects a refreshing departure from tokenism. The massive Rs 1.49 lakh crore Budget, presented by Finance Minister Etela Rajender in the State Legislative Assembly, lays down a clear policy direction focusing on the revival of rural economy, welfare of weaker sections, uplift of sections engaged in traditional occupations and boosting irrigation and agriculture sectors. The revenue-surplus Budget strikes a fine balance between welfare and development and represents hope and optimism for the future of India’s newest State. Since rejuvenation of the rural sector is critical to realising Chief Minister K Chandrashekhar Rao’s vision of ‘Golden Telangana’, the Budget justifiably lays emphasis on the creation of income generating avenues for those involved in traditional occupations by the adoption of modern technologies. The welfare of backward classes, scheduled castes, scheduled tribes and minorities got huge allocations while irrigation continues to be the top priority area with Rs 25,000 crore being earmarked for the sector to achieve the goal of creating irrigation potential for one crore acres in the State. A commendable feature of Telangana’s economy is that it could achieve a double-digit growth despite the adverse impact of demonetisation. Clearly, this is a testimony to the resilience of the State economy. The Gross State Domestic Product (GSDP) growth rate is likely to be 10.1 percent as against the expected national GDP growth of 7.1 percent.

Significantly, since its formation in June 2014, Telangana has been witnessing a distinct upward shift in the growth trajectory year-on-year. The GSDP growth at constant prices (2011-12) improved from 5.6 percent in 2013-14 to 8.7 percent in 2014-15, and to 9.5 percent in 2015-16. A significant feature of the Budget is that the allocations for the welfare of SCs and STs are done in proportion to their population under Special Development Funds. Accordingly, the SDFs for SCs and STs have been allotted Rs 14,375 crore and Rs 8,165 crore respectively. It is also noteworthy that the expenditure proposed under ‘Pragati Paddu’ (spending on schemes) at Rs 88,038 crore is higher than the estimated Committed Expenditure of Rs 61,607 crore. This has become possible because of rationalisation of expenditure and efforts to mobilise additional resources. The Budget estimates for 2017-18 indicate a revenue surplus of Rs 4,571 crore. The State government hopes to overcome the adverse impact of demonetisation on revenue collections by likely improvement in the tax devolution from the Centre and better tax compliance owing to reduction in cash transactions. The estimates clearly show an unflinching commitment of the government to ensure that the benefits of development reach the poor and the underprivileged.