Eetela Rajender, the state finance minister, presenting 2017-18 budget in State Assembly
“It may be true that you can’t fool all the people all the time. But you can fool enough of them to rule a large country”, says Will Durant, an American Historian.
As Telangana is not a very large state, now the people of the state are sensing the deteriorating financial situation in their state. The finance Department is still struggle to get a fine print of the budget after four budgets. Eetela Rajender, the state finance minister, today presented 2017-18 budget with Rs 1.49 lakh Crore outlay. Ironically the the last year’s budget is yet to cross Rs one lakh Crore expenditure. Though 2016-17 budget was presented with Rs 1.30 lakh crore, it was cut to Rs 1.12 lakh Cr in its revision estimates. It has to be seen whether the budget will end up with the same figure or will drop below Rs One lakh crore, thanks to PM Modi’s demonetization drive. The first budget was presented to the new assembly with Rs 1,00,637 by KCR’s government with much fanfare. But contrary to the expectations of the public, the fist budget of the new state turns out to be a disastrous as the actual expenditure ended much below Rs 65,000 Crore (Rs 62,306 crore to be precisely). In the second budget i.e., in 2015-16 FY, there was no revision in the data pertaining to the first year’s budget. All the original numbers were carried over in the revised estimates. Even the second time brought no better luck to the state finance minister. 2015-16 budget was also termed as One lakh Crore Budget. This time the expenditure is much above of Rs 1.15 lakh crore. Eventually the state government had to reduced to Rs 1,00,061 Crore in revised estimates as receipts are not up to its expectations. Finally the 2015-16 financial year, too, ended up with Rs 97,922 Crore dashing the hopes of CM KCR’s ‘One Lakh Crore Budget’. Undeterred by these failures the state finance minister presented the third budget with Rs. 1,30,415 Crore, but eventually authorities have to cut down the size of the budget Rs 1,12,191 Crore in revised estimates. State Reality sector especially Hyderabad region affected severely. It forced the authorities to down size the receipts targets further low. It has be seen whether third year will break the jinx and the state budget will cross Rs One lakh Crore.
In to debt trap
Post bifurcation Telangana has taken up Mission Bhagiratha and Mission Kakatiya with utmost priority. Setting aside the political ciritism, these are the two big schemes launched in the new state. Barring these two, no other major project was taken up. Surprisingly the state Debt has been galloping. Bifurcation of 58 years old United Andhra Pradesh left Telangana in Rs 61,711 Crore Public debt. United AP had Rs 1,48,060 Crore outstanding public debt as on 1st June 2014. The Union Government had bifurcated the debt burden on population basis. Starting from the first year itself the State Government went for heavy borrowing programme, which ultimately pushed the state into a debt trap. The state public debt outstanding had jumped to Rs 83,845 Crore, Rs 93,115 Crore and Rs 1,14,813 crore in successive budgets starting 2014-15 onwards. Today the latest budget for 2017-18 shows that the outstanding public debt will go up to Rs 1,40,523 Crore by 31st March 2018. It was also estimated that the state government has to pay more than Rs 11,000 crore for debt servicing in this financial year.
The state government is expted to garner Rs 69,000 crore from tax, non tax segments for 2017-18 budget. Rs 62,618 crore from Tax Revenue and Rs 6,601 crore from non tax ledger, according to the budget documents. This year the state government is expecting Rs 17,005 crore as its share in Central Taxes and Rs 26,857 Crore as Grants in Aid from Union government. It is still confusing that how the state government expecting enormous amounts from Centre, as the GST is to be rolled out from July. In the last budget the government was expected to get Rs 27,000 Crore as its share in both Central Taxes and Grants in Aid. This year the state government decided, it seems, to take up more populist schemes. And also it want to allocate more funds to its key schemes like double bed room projects. It is the penultimate budget for KCR’s Government , as the next assembly elections are schedule in 2019. To fund the massive schemes, the state government has decided to raise Rs 26,400 cores from open markets sources. And it is also expected to raise Rs 4,000 crores from various loans including a loan from Union government. The massive loan borrowing programme ends the public debt of the state to Rs 1,40,000 crore, almost equal to the entire state budget expenditure of the year.
Gulam Shaik Budan