HYDERABAD: The State governments will have trouble balancing their budgets due to shortfall in devolution of taxes from the Centre, former finance minister P Chidambaram said here on Saturday.
According to him, states were deprived of Rs 5,000 crore each on an average, which could dent their budget math, and hence chief ministers should raise the issue with Prime Minister Narendra Modi.
He called out Telangana Chief Minister K Chandrasekhar Rao, in particular, who he said was ‘sometimes a friend and sometimes a foe,’ to take notice.
“The funds from the Centre (tax devolution) were estimated at Rs8 lakh crore for FY20, but it now stands at only Rs 6.56 lakh crore. In other words, it is a shortfall of Rs1.5 lakh crore. All 30 states were deprived of funds...Every state on an average will get Rs 5,000 crore less. How can states balance their budgets?” he questioned.
Speaking at an event at Muffkham Jah College of Engineering and Technology here, he said the quality of jobs including that of engineers, whose starting salary fell to about Rs8,000 a month, leaves much to be desired.
“It shows how depressed the situation is. Several engineering colleges are being closed. There’s nothing in the budget about jobs. Unemployment is high at over 6.5 per cent...demonetisation and flawed GST destroyed job creation,” Chidambaram said.
Raising suspicion about the revised tax collection estimates presented in the budget last week, he said the actual numbers that will come in May will likely show a further fall in revenue. For FY20, the government initially estimated a tax revenue of Rs16.49 lakh crore, but revised it downwards to Rs15 lakh crore now.
“It’s a shortfall of Rs1.45 lakh crore, but when the actual numbers come in May, they could be even lower,” he said.
Lower tax collections could further dent the flow of funds to states, which are already facing a fund crunch. Buttressing his point of likely lower tax revenue, Chidambaram said every sector in the economy was performing below expectations and were not generating income.
Reeling out numbers, he said corporate taxes were down by Rs 1.56 lakh crore, customs duties by Rs 40,000 crore, excise and GST collections by about Rs5 2,000 and Rs 51,000 crore respectively. “No tax is being collected as per estimated,” he said adding, “Every number presented in the Budget is a suspect, nobody believes the figures.”
Chidambaram takes part in anti-CAA protest
A group of lawyers staged a protest against CAA-NRC-NPR at Indira Park here on Saturday. “This movement will decide whether Gandhi or Godse’s ideology prevails in the country,’’ a lawyer said during the protest demonstration. Former finance minister P Chidambaram, who was in the city to attend an event, also joined the protest.