Tax hike likely to keep the welfare schemes going
HYDERABAD: Despite being one of the best performing States in the country, Telangana may be forced to hike the taxes to augment its revenue due to the present economic slowdown coupled with the Centre’s decision to ignore the State’s demands.
The growth rate of the State was 21 per cent, but after the economic slowdown it dropped to as low as 1.73 per cent. However, the State bounced back within a few months to achieve 9.5 per cent growth rate.
“Telangana’s growth never slipped into minus unlike other States,” the official sources said. The State is facing shortage of financial resources due to the huge cut in Central taxes as well as the Centre avoiding paying the GST/IGST dues to Telangana. Further compounding the problems of the State, the Centre has decided not to approve the Fifteenth Finance Commission’s recommendation to give a special grant of Rs723 crore for 2020-21. As the Central government’s economic performance was not good, the State is sceptical of getting its due share as per the estimates of the Union Budget 2020-21.
Funds for schemes
Telangana spends almost 50 per cent of its revenues on the welfare schemes and the developmental activities. The State government is no mood to stop these schemes and welfare and agriculture would be on top of the government’s agenda in 2020-21 Budget too, the officials said.
Chief Minister K Chandrasekhar Rao held a series of meetings this week with the finance officials and assessed the situation. According to sources, he made up his mind that TS would not depend on the Centre’s financial assistance this year. The State has to gear up to keep the schemes going.
Telangana requires a huge amount in the next five years for the implementation of its programmes. The State requires Rs40,169.2 crore for the operation and maintenance of lift irrigation projects and Rs12,772.05 crore for Mission Bhagiratha between 2020-21 and 2025-26. Thus, the State government is expected to give its nod for hiking the power tariff also. According to sources, the poor using 50 units or below may be spared this year. But the rich have to pay more from April onwards.