Hyderabad: With the economic downturn in the country affecting all States and virtually covering all sectors, the top brass in the State bureaucracy is busy reworking the strategies to spur growth and insulate key sectors, particularly irrigation and agriculture, that are crucial, from the impact of the downslide.
Chief Minister K Chandrashekhar Rao has already called for financial discipline, austerity and practical budget estimates based on economic realities faced by the nation. The State, which had made massive strides on all fronts, including revenue generation, development and welfare schemes since its formation, will have to do some tight-rope walking to manage its finances without affecting the financing of key commitments in a major way, top officials told Telangana Today.
The officials, pointing out that the worrisome signs of India slipping into recession was evident in all sectors, said that Telangana, despite its proven record of a buoyant growth rate all through the first five years, was no exception to the pullback effect covering all States. If the revenue growth of the State so far this year is any indication, a tough time is in the offing. The State could post only 2.89 per cent growth in overall revenues in the first four months, which clearly gives an idea of what is in store for the State ahead this year, the officials said.
Focus on irrigation
The irrigation sector in the State, however, will remain largely unaffected since the financials have already been tied up with various consortiums of financial institutions, the officials said.
There is no denying the fact that the economic slowdown has had its impact on sectors that have been major sources of revenue earnings. “The State is doing reasonably well in commercial taxes, posting about 10 per cent growth in the first quarter of the current fiscal,” a high ranking revenue official said.
But so far as income generation from Excise department is concerned, normally a major source of revenue, the growth is as low as 2.4 per cent in the first quarter. But by the year end, it may end up close to the normal growth of 10 to 12 per cent as was the case in the last financial year. While one official termed the dip in excise revenue as “unbelievable” since the the State had gone through Assembly, Lok Sabha and local bodies elections in the past nine months, when liquor sales are higher than normal, another official attributed the drop in excise revenues to some ‘adjustments.’
The revenues from Stamps and Registration, however, was as projected — steady at 2.6 per cent.
Transport revenue dips
“Transport revenues have also come down substantially because of the downtrend in automobile sales that affected GST collections. Revenues from automobile registrations is showing a negative trend,” the officials said.
The official also pointed out that Telangana State was getting only one per cent of the GST from the overall 42 per cent devolution to various States. The dip in the GST collections will see a proportionate drop in the State GST share.
Quoting the predictions of investment bankers, the officials said the economic slowdown may not have any immediate solution, and the sluggishness may last two to three years.