Telangana tightens its belt to tackle economic slowdown

Telangana’s revenues see a dip owing to ongoing slowdown in country, delay in funds release by Centre further aggravates situation

By   |  Published: 13th Dec 2019  12:30 am

Hyderabad: Reeling under acute financial crisis following the economic slowdown in the country, the State government on Thursday began its efforts to implement austerity measures in the wake of the State Cabinet’s decision in this regard on Wednesday.

The departments were told that no fresh proposals would be entertained during the current fiscal and they were also barred from making any additional expenditure under existing schemes beyond budgetary allocations.

Soon after Chief Minister K Chandrashekhar Rao emphasised the need to maintain restraint on unnecessary expenditures, the Finance Department was asked to prepare guidelines for implementing austerity measures in all government departments, sources said, adding that all government departments were directed to list out priority projects and expenditures for releasing necessary funds.

“The Chief Minister does not want to compromise on welfare schemes. Besides irrigation and power projects, the government is keen on continuing its schemes such as Rythu Bandhu, farm loan waiver scheme, double-bedroom houses, Kalyana Lakshmi/Shaadi Mubarak, and other welfare schemes,” a senior official in the Finance Department said.

Finance officials have already submitted a report to the Cabinet on issues pertaining to pending schemes, the release of funds and the State revenues among others. According to the authorities, the State had witnessed a decline in tax revenues by Rs 838 crore till October-end. Besides GST dues amounting to Rs 4,531 crore from the Centre, the State also saw about Rs 2,332 crore reduction in GST revenues.

The Centre allocated about Rs 19,719 crore from the Union Budget to the State for fiscal 2019-20. Though this is 6.2 per cent more than that of last fiscal’s Rs 18,560 crore, the Centre released only Rs 10,304 crore as tax share till October. During the last fiscal till October, the State received Rs 10,528 crore, resulting in a revenue decline of 2.13 per cent when compared to that of last year.

Besides fall in its own tax revenues, the State government is yet to receive about Rs 29,891 crore from the Central government, including Rs 4,531 crore in GST dues during the current financial year. The Centre also failed to release funds amounting to about Rs 450 crore under Backward Region Grant Funds (BRGF), Rs 313 crore recommended by Finance Commission for rural development, and Rs 393 crore under Urban Local Bodies (ULBs) grants among others.

“We are staring at a financial crisis where the State is falling short of Rs 2,000 crore every month while comparing both revenue and expenditure of the State,” the official added. The Finance Department was also directed to explore various options, including the of government lands, to increase the State revenues in the wake of the economic slowdown.

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