For the last one fortnight, the TRS leaders are not hiding their displeasure over the bleak prospects of receivables from the Centre. Equally depressing was the lack of of any sign of cash registers ringing at home.
They are worried more about the big-ticket welfare schemes — which are a major burden on the State — taking a knock. In the absence of a helpful Centre, a burden of Rs 43,000 crore per year will sure become an albatross around the State’s neck.
In fact, expecting a shortfall in the receipts, the State had pruned its vote-on-account Budget from Rs 1.82 lakh crore to Rs 1.36 lakh crore. The State planned to mop up Rs 10,000 crore by selling government lands but it is a long shot. On February 1, the day the Budget was presented in Parliament, Chief Minister K Chandrasekhar Rao said that the State would be in deep trouble if the present trend continues. He hinted that the financial planning might go awry because of off-kilter national economy, implying welfare schemes.
Finance Minister Nirmala Sitharaman’s clarifications subsequently did not have much impact on the TRS since it contends that the Centre was adopting a step-motherly attitude in devolution of funds to performing states.
At a news conference in Hyderabad on Sunday, Sitharaman took exception to the State leaders saying that though Telangana had contributed significantly to the national exchequer, the Centre was speaking in a condescending manner saying that it was giving funds to the State as though from its pocket.
“We use the word “give” in Parliament to describe devolutions. Let the State make a plea to the Speaker to give a ruling that it is an unparliamentary word. Then we will use some other word,” she said, lacing her argument in sarcasm and added that the devolutions to the State from the Centre during the 14th Finance Commission and the 15th Finance Commission had increased by 128 per cent.
As welfare schemes are the lifeline for the State government, it cannot discontinue them, as there would be a political backlash from people and opposition parties will always be ready with their ammunition to pounce on the TRS that it was not honouring its commitment to the people.
Already the rumblings about payments for several welfare schemes like Rythu Bhandhu and Kalyana Lakshmi could be heard clearly in several districts.
Cost-cutting measures
For its part, the TRS government, which is in a financial bind, is doing the obvious -- resorting to cost-cutting by putting a tight squeeze on payments to be made for works done.
There are reports that payments of Rs 20,000 crore have been kept on the hold to tide over the difficult situation.
Recently IT Minister KT Rama Rao had hinted that the Centre’s squeeze on funds might hurt Telangana.
Referring to the Union Budget he said, the government may find it difficult to mobilise funds for welfare schemes which is being viewed as an argument in preparation that if they get derailed, it is the BJP government at the Centre one should blame.
The State is more interested in Centre’s devolution as it would have enough freedom to use the resources.
In 2019-20, the Budget had indicated that they would be of the order of Rs 19,780 crore but in the revised Budget the figure shrank to Rs 15,987 crore, less by Rs 3,731 crore. The Centre blamed poor tax collection to the decrease in the devolutions which the TRS government had dubbed it as an indication of its inefficiency in collecting taxes.
When it came to 2020-21, more surprises were in store for the State. The devoltuions went down from 42 per cent to 41 per cent which would be a huge cut.
This apart, the share of the State is 2.437 per cent of the total tax collection by the Centre which has been reduced to 2.133 per cent because of the slowdown.
The Central devoutions are estimated to be Rs 16,726 crore but the TRS is doubtful if the full amount would reach the State if the 2019-20 experience is any indication.
Further, the TRS leaders say if actual realisation was Rs 15,987 crore as against Rs 19,780 core in 2019-20, it is anybody’s guess at to what extent Rs 16,726 crore would come down to, may be to Rs 14,000 crore or thereabouts in 2020-21.