Centre’s disparity in Grant-in-aid funds to Telangana

Grant-in-aid funding is typically provided by the union government to the States for the implementation of various schemes and programmes.

Hyderabad: Disparity in grant-in-aid funding to Telangana from the Centre is continuing to hinder the development of the State. Telangana received a meagre Rs.2,137 crore i.e., five per cent of the budget estimate of Rs.41,259 crore in the first five months of the current fiscal of 2023-24. This is, by far, the lowest percentage of grant-in-aid funding received against the budget estimates since State formation in 2014.

Grant-in-aid funding is typically provided by the union government to the States for the implementation of various schemes and programmes. This financial aid plays a crucial role in advancing the socio-economic development of regions across the country.

---

Despite playing a pivotal role in the country’s economy, Telangana has been facing the consistent harassment from the Centre in the form of inadequate funds. The latest data revealed that Telangana has frequently been on the receiving end of this disparity from the Centre. Soon after Telangana formation, the State government anticipated receiving Rs.21,720 crore in grant-in-aid from the Centre, but the actual allocation was a mere Rs.6,489 crore. This trend of under-funding has continued throughout the last nine years, with the union government allocating less than the State’s budget estimates.

Over the years, the budget estimates increased from Rs.21,720 crore in 2014-15 to Rs.41,001 crore in 2023-24. Similarly, the grants-in-aid rose from Rs.6,489 crore in 2014-15 to Rs.13,087 crore in 2022-23. Except for the fiscal years of 2019-20 and 2020-21 when the Covid-19 pandemic had an adverse impact on the economy, the grant-in-aid funds from the Central government never exceeded the budget estimates throughout this decade. Ironically for these two fiscals, the budget estimates were reduced significantly. The Central grants were largely around 31 per cent of the budget estimates.

However, the situation worsened in the current financial year, with only five percent of the expected grant-in-aid provided during the first five months. The Finance officials anticipate the grant-in-aid allocation to Telangana decrease further over the next couple of months, considering the election fever.

Interestingly, BJP-ruled States have been receiving substantial allocations. Gujarat, the home State of Prime Minister Narendra Modi, consistently received grant-in-aid in excess of its budget proposals. In the last fiscal year i.e. 2022-23, Gujarat requested Rs.15,982 crore in grant-in-aid from the Centre, but the actual allocation stood at a whopping Rs.23,131 crore, representing a 45 percent increase over the State’s estimate.

Congress-ruled States also appear to benefit more significantly from grant-in-aid funding than Telangana, raising questions about equitable distribution of resources and financial support to the States. For instance, Chhattisgarh was estimated to receive Rs.16,750 crore in grant-in-aid for the financial year 2022-23, and the Centre provided 79 percent of this estimate, amounting to Rs.13,148 crore.