It cannot get more ironical than this. For a State that has set an example for the rest of the country in terms of innovative welfare and development schemes, Telangana has been handed out a raw deal in the Union Budget for 2020-21 presented by Finance Minister Nirmala Sitharaman. There was no mention about any assistance for the path-breaking initiatives like Mission Kakatiya and Mission Bhagiratha, despite the recommendation by NITI-Aayog that they not only deserve central funding but are also fit to be replicated in other States. At a time when more and more States are adopting Telangana’s development initiatives, the Centre’s callous approach is extremely disappointing. It must be pointed out that the Economic Survey report has also made a special mention about the success of ‘Rythu Bandhu’ model. But, the NDA government has completely ignored the interests of Telangana and also turned a blind eye to the promises made under the Andhra Pradesh Reorganisation Act. The drastic cut in central funds to Telangana has no rationale and comes as a double whammy. While the State is entitled to receive Rs 19,718 crore for financial year 2019-20, the Centre has slashed it to Rs 15,987 crore. Such heavy cuts reflect imprudent fiscal mismanagement by the NDA government and is bound to have an adverse impact on State government’s financial plans. It is unfortunate that despite Telangana contributing a lion’s share to the country’s economy, the Centre is showing discrimination in allocation of funds and reducing the State’s share in the Central taxes.
The high performing States like Telangana will suffer gross injustice with the central government approving the report of the 15th Finance Commission which recommended reduction in the share of central taxes to the States from 42% to 41%. As a result, Telangana’s share from the divisible pool of central taxes will be slashed by Rs 2,381 crore. This is unfair for a State that has been consistently setting benchmarks in balanced development and getting validation from central agencies. By registering a consistently impressive growth rate since its formation and striking a fine balance between welfare and development, Telangana has been a shining example of good governance. It is because of the Centre’s dismal economic management that a progressive State like Telangana is now facing the brunt. On Goods and Services Tax (GST), the Centre had promised to compensate for revenue losses suffered by the States but is yet to clear payment of Rs 1,137 due to Telangana. In addition, the drastic reduction in the funds for the urban local bodies will adversely impact Telangana which is in the process of rapid urbanisation. The union budget was also silent on funding requests for various ongoing programmes in the State.