For the last several months, Chief Minister K Chandrasekhar Rao has been expressing severe concern over the present ‘economic recession’ sweeping the country, saying that recession has adversely impacted the Telangana state economy and state government earnings.
He made several statements that his government will present a ‘realistic budget’ in the backdrop of recession but not increase the budget size for ‘false pride’.
KCR himself presented a ‘realistic budget’ last year by slashing the budget size by 20 per cent from Rs 1.82 lakh crore in ‘vote on account’ budget in Febuary 2019 to Rs 1.46 lakh crore in ‘full fledged budget’ in September 2019.
But when T Harish Rao presented budget in Assembly for the first time in his capacity as finance minister on Sunday, everyone was shocked to see a ‘jumbo budget’, in which the budget size was increased to Rs 1.82 lakh crore.
On one hand, Harish in his speech talked about the adverse impact of recession on Telangana economy, how Telangana government’s revenues dipped due to reduction in revenue collections and cut in central grants.
On the other hand, he presented a jumbo budget by fudging the figures over last year.
He could not explain from where the government will mobilise the resources to achieve the ‘jumbo budget’ targets.
Harish hass pegged the budget size at a whooping Rs.1,82,914.42 crore. Out of this, the revenue expenditure has been pegged at Rs.1,38,669.82 crore and capital expenditure at Rs.22,061.18 crore. The revenue surplus was estimated at Rs.4,482.12 crore, while the fiscal deficit at Rs.33,191.25 crore.
Harish said, “This Budget has been prepared against the backdrop of overall economic slowdown gripping the Indian economy. The economy is facing slowdown for the past one and a half years. As a result, there is reduction in tax devolution and other transfers to the State by the Centre, and decline in the growth of State revenues. There is an immediate need to keep up the growth momentum in the State. The tax devolution from Centre to the State is expected to be lower in 2019-20 by Rs.3,731 crore as compared with the budget estimates. There are delays and shortfalls in the release of State’s share in Integrated Goods and Services Tax and GST compensation. Following the economic slowdown, the growth of the State’s own revenues in 2019-20 (till the end of February) is estimated to be at 6.3%, much below the growth of 16.1% achieved in 2018-19. 3. On top of this, following the recommendations of the Fifteenth Finance Commission, there will be a reduction in the share of Telangana in Central tax devolution from 2.437% to 2.133 % resulting in reduction of tax devolution by an amount of Rs.2,384 crore in 2020-21.”
After giving the above lengthy explanation on the impact of economic recession on Telangana, no one could understand how KCR and Harish approved this ‘jumbo budget’.
KCR and Harish should now explain: Is this realistic budget or unrealistic budget?
