Telangana spends own funds as Centre turns stingy

According to data furnished by the union Finance Ministry in the Rajya Sabha, Telangana's own revenue played a significant role in funding its expenditure from 2016-17 to 2022-23

Hyderabad: Telangana has consistently been one of the top three States in terms of generating its own revenue and using the same to cover more than 70 per cent of its expenses since 2016-17. Thus, the State manages its routine spending including salaries and welfare programmes, without relying heavily on the Centre and other revenue sources.

However, the State has found a spot among States receiving the lowest share in the Central taxes.

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According to data furnished by the union Finance Ministry in the Rajya Sabha, Telangana’s own revenue played a significant role in funding its expenditure from 2016-17 to 2022-23. The percentage of the State’s own revenue in State expenditure stood at 71.46 per cent in 2016-17, 77.32 per cent in 2017-18, 77.30 per cent in 2018-19, 68.90 per cent in 2019-20, 59.05 per cent in 2020-21, 74.78 per cent in 2021-22, and 70.60 per cent in 2022-23.

“The State revenue comprises both tax revenue and non-tax revenue. Having more than 70 per cent of its revenue expenditure covered by its own revenue indicates that Telangana’s financial health is in good shape. Despite facing the challenges of the Covid-19 pandemic, Telangana has been among the top-performing major States in the country,” an official in the Finance department explained.

As per reports by the Reserve Bank of India on “State Finances: A Study of Budgets for 2022-23”, Telangana has largely competed with other major States like Maharashtra, Gujarat, Karnataka and Haryana for the top slot among the top five performing States having a higher share of their own revenue contributing to their respective revenue expenditure over the last seven financial years.

However, Telangana has remained at the bottom among these performing States when it comes to its share in the Central taxes. The State’s share in the Central taxes decreased from 14,876.61 crore in 2016-17 to Rs 13,990.13 crore in 2021-22. Moreover, the percentage of tax devolution from the Central government also dropped significantly, going from 2.44 per cent in 2018-19 to 2.1 per cent in 2022-23.