HYDERABAD: The Telangana government, which is staring at a major financial crisis due to the Union government's denial of permission for open market borrowings, may face another problem in the form of 'grant-in-aid contributions'.
If the Centre continues to deny permission to raise Fiscal Responsibility and Budget Management (FRBM) loans for this financial year, the loss of revenue for Telangana will be Rs 53,000 crore.
The State government had expected to receive Rs 41,000 crore under grant-in-aid contributions from the Union government in 2022-23. However, in the 2021-22 financial year, the grant-in-aid contributions from the Centre were less than Rs 10,000 crore.
If the Centre's non-cooperation continues, the shortfall in the Budget due to grant-in-aid and FRBM loans will be around Rs 83,000 crore. The grant-in-aid contributions to Telangana from the Union government in the first month of 2022-23 was just Rs 189.66 crore against Rs 41,001.73 crore proposed in the State Budget.
The size of the Budget was Rs 2.56 lakh crore for 2022-23. If the State is not allowed to raise FRBM loans and the grant-in-aid is limited to Rs 10,000 crore, then the size of the budget may be reduced to Rs 1.73 lakh crore.
The grant-in-aid contributions received by the State in 2021-22 were just Rs 8,619.26 crore, as against the estimated amount of Rs 38,669.46 crore. In 2022-23 too, the chances of the State government getting estimated grant-in-aid are remote. This will further compound the financial crisis of the State government and will have an adverse impact on the welfare schemes and developmental works.
Revenue Telangana stands to lose revenue of Rs 53,000 crore if the Centre continues to deny permission to raise FRBM loans for this financial year
The size of the State Budget for 2022-23 stands at Rs 2.56 lakh crore
Budget size likely to be reduced to Rs 1.73 lakh crore if the State is not allowed to raise FRBM loans and the grant-in-aid is limited to Rs 10,000 crore