HYDERABAD (IANS) — Hit by economic slowdown and the resultant slump in revenues, Telangana slashed its Budget for 2019-20 by nearly 20 per cent and hinted that it may sell government lands to raise additional resources to meet any contingency.
Chief Minister K. Chandrashekhar Rao on Monday presented a Rs 1,46,492 crore Budget, comprising revenue expenditure of Rs 1,11,055 crore and capital expenditure of Rs 17,274 crore.
The state has projected fiscal deficit at Rs 24,081 crore and estimated revenue surplus at Rs.2,044 crore.
The government had presented a Rs 1,82,017 crore vote-on-account Budget in February, but the economic slowdown and fall in revenues compelled it to revise the proposals.
In his Budget speech in the state legislative Assembly, Rao said that slowdown has impacted all the sectors.
KCR, as Rao is popularly known, said the government can sell lands worth thousands of crores freed from land grabbers to raise additional funds.
“The government has decided to transfer these funds to the Special Development Fund (SDF) and to use them to meet any contingency arising in any department for meeting the needs of the people,” he said.
KCR announced that no new works are proposed to be taken up without clearing the pending dues of all the departments.
He told the House that the severe economic slowdown is having serious repercussions in the country.
“The economic slowdown has adversely impacted all the sectors. There is negative growth in many key sectors, which mirrors the prevailing economic situation. The official data put out by the institutions connected with these sectors present a gloomy picture,” KCR said.
He said the growth in the state’s tax revenues in the first quarter of 2019-20 was only 5.46 per cent against an anticipated 15 per cent.
The state recorded an average of 13.6 per cent growth in commercial taxes for the last five years, but it was only 6.61 per cent in the first four months of the present financial year.
Motor vehicle taxes had an average growth rate of 19 per cent for the last five years, but it registered a degrowth of 2.06 per cent in the first four months of FY20.
Non-tax revenue too fell to minus 14.16 per cent against an average growth rate of 14.9 per cent. “In all, the non-tax revenue declined by 29 per cent. This is purely due to the economic slowdown,” he said.
KCR said that in addition to the decline in the state’s own revenue, the Centre also cut the state’s share in Central taxes by 4.19 per cent for 2019-20. The Centre also reduced allocations in several other items, causing severe losses to the state.
KCR also claimed that Telangana is still in a slightly better position compared to other states. He said the state is raising funds from the financial institutions within the limits of Fiscal Resopnsibility and Budget Management (FRBM) besides following the Centre’s guideline.
He said the government has decided to utilise extra budgetary funds for the construction of major irrigation projects. With funds obtained from the financial institutions and margin money, the government is completing the irrigation projects. He assured the people that construction works on irrigation projects will continue.
KCR claimed that the Gross State Domestic Product (GSDP) of India’s youngest state doubled in the last five years. He also noted that with 21.49 per cent average revenue growth rate in the last five years, Telangana stood first amongst the states.
He pointed out that all the sectors achieved impressive growth during the last five years. The value of IT exports doubled to Rs 1.10 lakh crore, he said.
KCR also revealed that in the last five years, Rs 2,72,926 crore was collected by the Centre from the state in the form of various taxes.
While the state spent Rs 5,37,373 crore on welfare and development, the Centre’s contribution for implementing its 24 schemes was a mere Rs 31,802 crore, he added.