In the Union Budget 2021-2022, Telangana’s budget was a shock to the State Government.
The Telangana Rashtra Samithi (TRS) is worried it might miss out on nearly Rs. 6,000 crore grants under the 15th Finance Commission in the next five years (2021-2025.)
The declared Union Budget is said to be fruitless to Telangana, as no relief in the budget was announced for the State. Financial crisis occured due to the pandemic Novel Coronavirus or COVID-19, also witnessed no improvement and packages to bring the State economy back.
The K. Chandrashekar Rao led Telangana Government has been demanding that the Centre not reduce the devolution of taxes from 2.47 % to 2.1 % as recommended by the Commission recently.
However, the Union Finance Ministry neglected the request and reduced the devolution taxes.
Finance Secretary K. Ramakrishna Rao briefed the outcome of the budget to the Chief Secretary Somesh Kumar soon after the budget presentation was over in the Lok Sabha.
The Telangana Government officials also analysed the budget outlay. As per their analysis, Telangana may not get sufficient grants as per the Finance Commission recommendations in the coming years.
The State official who wished to be anonymous said, “The Government has made several pleas to the Centre to continue the devolution of funds to the State at 2.47 % and scrap the Commission’s recommendation of 2.10 %. The fresh recommendation which comes into force from 2021-2022 financial year would leave Telangana in dire problem of funds crisis as the State would lose nearly Rs. 1,500 crore every year.”
Till the 14th Finance Commission recommendations, Telangana received Rs. 16,700 crores per year as grants.
The Telangana Chief Secretary briefed the CM about the implication of new Finance Commission recommendations.
The government was also expecting a ‘covid fund’ in the new budget. However, there is no relief from the Central Government which indicates that the State Government needs to hunt for funds on its own in the new financial year to better the economy.
Though the Union Budget was claimed to be growth oriented, Telangana was not relieved with the budget.
Ms. Sitharaman said the released budget would boost the economy of India, enhance healthcare system, road development and other infrastructure projects across India. However, the infrastructure budget allocation was given to states which were going to conduct Assembly elections in 2021 or 2022. States like West Bengal, Kerala, Tamil Nadu and Assam.
In addition, capital expenditure allocation is Rs. 5.54 lakh crores for 2021-2022.
The President of the Federation of Telangana Chambers of Commerce and Industries (FTCCI) Ramakanth Inani, said the Union Finance Minister Nirmala Sitharaman presented the budget amidst a lot of expectations and hope among various sections of the society. The FTCCI President said, “We expected an extension of the PLI scheme to few other sectors but there is no inclusion of additional sectors in the scheme. We welcome the government decision not to increase taxes or imposing any COVID-19 related cess, which the Industry feared despite the revenue deficit, but it is disappointing to note that no additional exemptions are given to taxpayers in the times of crisis (sic.)”
In addition, the Telangana is upset over
the fact that there is not a single mention about the repeated requests made by the Telangana Government for sector specific releases.
However, the Telangana Rashtra Samithi (TRS) leaders did not react to the released budget yet. Party sources said that there were no directions from the party leadership to speak on the budget. Chief Minister K Chandrashekar Rao was at his farmhouse and the TRS working president K.T. Rama Rao was on a visit to Sircilla. Even Finance Minister T. Harish Rao also did not speak about the budget.
It is expected, the TRS Government and its leaders would break their silence and speak about their opinion on the 2nd of February, after receiving directions from K. Chandrashekar Rao.
