HYDERABAD: Despite the economic slowdown and poor prospects of receipts from the Centre, Finance Minister T Harish Rao was bold enough to present his maiden jumbo Budget of Rs 1.82 lakh crore for 2020-21 in the Telangana Assembly, which is 25 per cent more than the 2019-20 budget.
While presenting the Budget, the Finance Minister was under pressure to ensure that the welfare schemes of the State were carried forward and ensure that the funds required for them were mobilised despite the inclement economic weather. Though the Opposition alleged that the Budget size was "inflated", Harish Rao successfully struck a balance to increase the State revenues to sustain the welfare programmes.
Harish Rao considering Telangana as “the land of milk and honey” in its literal sense appears to be the secret behind his efforts to present the hefty Budget. The State government is expecting huge revenues through the sale of lands to meet the expenditure on the welfare and development programmes. Telangana is the only State in the country which is spending over Rs 40,000 crore on welfare, besides Rs 10,000 crore on power subsidy.
However, what if the State fails to get revenues through the sale of lands, as it could not raise Rs 10,000 crore through similar means in 2019-20 Budget, is the moot question. "We have plan A, B, C and D for the Budget. If the revenue receipts are not up to the expectations, we will explore other alternatives and change our plan accordingly," sources in the Finance Department told Express.
The State government has decided to sell the vast extent of lands of the Housing Board, Rajiv Swagruha and DIL. "These government institutions were established when the real estate sector was non-existent. At present, the real estate has become a huge industry. Hence, the government has decided to sell the non-performing assets held by these institutions to raise revenues," Harish Rao said in his Budget speech.
It means that "the land bank" would help in continuing the "welfare" schemes. In addition, the government has also decided to enhance the income accruing from sand and other minerals.
The State expects to raise Rs 14,515.17 crore by the sale of lands and Rs 5,500 through mines and minerals, both of which are considered non-tax revenues.Though the sources are doubtful of realising the Rs 1.82 lakh crore budget, the State’s economy is not so precarious when compared to many other States in the country.
As per the advanced estimates, the Gross State Domestic Product (GSDP) in 2019-20 is estimated at Rs 9,69,604 crore at current prices indicating a growth of 12.6 per cent. However, the budget estimates of 2019-20 was Rs 1.46 lakh crore.
Though the expected growth was 12.6 per cent, the budget size witnessed 25 per cent growth. Owing to the economic slowdown, there has been a slight decline in the growth of GSDP, in current prices, from 14.3 per cent in 2018-19 to 12.6 per cent in 2019-20.
Increasing revenue
The Telangana government has decided to sell the vast extents of land of the Housing Board, Rajiv Swagruha and DIL to meet the expenditure on welfare schemes. It has also decided to enhance the income accruing from sand and other minerals. The government expects to raise Rs 5,500 through mines and minerals, both of which are considered as non-tax revenues
The overall Budget estimate for expenditure on agricultural schemes is more than Rs 2,632 crore this year. There is no increase in the allocation for subsidy on supply of seeds to farmers, and there is no allocation for farm mechanisation subsidy and assistance to TS Seeds Development Corporation Ltd
Rs 500 crore allocated to Forest department
Of the total Budget this year, the highest has been allocated for afforestation schemes, including the State government’s pet project Haritha Haram. As much as Rs 500 crore has been allocated for the same. However, the allocation for Forest Department is the same as that of 2019-20