Hyderabad: Telangana Chief Minister K Chandrashekhar Rao criticized the 2020-21 Budget proposals introduced by the Centre, on Saturday. ‘It has left the State totally disappointed’, he said.
The CM has expressed anxiety that the Centre’s Budget allocations may adversely affect the development of Telangana State, which is a ‘progressive state’.
He alleged that the Centre had shown ‘discrimination’ against the State by imposing severe cuts on the funds to be released. ‘It was atrocious that the Centre had reduced the ratio of the State in the Central taxes. It is dangerous to have a scarcity of funds for several welfare and development programmes, schemes in the State due to the massive cuts in the Central funds’ he said.
In 2019-20 Union Budget Rs 1,037 crores were allocated for urban development in Telangana. But, in the current budget, it is reduced to Rs 889 crores. This is going to adversely impact Telangana’s plans of developing its towns and cities
— KTR (@KTRTRS) February 1, 2020
The CM following the budget session, held a four-hour-long discussion with the senior officials at Pragati Bhavan.
In this context, the CM has expressed the following views on the Central Budget.
• It was a Constitutional Right of every State to have a share in the Central Taxes. In the 2019-20 financial year, Rs 19,718 Crore was rightful due from the Centre to the Telangana State. In the last Budget the Centre had announced that this amount would be paid to the Telangana State. But in the revised estimates, it was reduced to Rs 15,987 Crore. With this, in the present financial year, among the funds due from the Centre, there is a reduction of Rs 3,731 Crore. In anticipation of obtaining Rs 19,718 Crore, this also led to the State Financial planning going awry as the Centre imposed cuts in the release of funds to the State.
• It is sheer incompetence of the Centre to decrease the ratio of the State in the Central funds given to the States. There is a need to collect taxes in 2019-20 and release the share of funds to the States. On every occasion, the funds are paid to the States according to the proposals declared in the Budget. There were occasions when there was a variation of one or half per cent. But reducing the funds to the tune of a whopping 18.9 per cent in 2019-20 clearly demonstrated the Centre’s faulty fiscal management.
• In the 2020-21 Budget proposals, on the funds to be allocated to the Telangana State, there will be a two type’s loss to the State. The Centre has accepted the proposals given by the 15th Finance Commission reducing the State’s share of funds from 42 per cent to 41 per cent. The second one is in the past Telangana State was given 2.437 per cent of share and this financial year it was reduced to 2.133 per cent. With this, there will be a direct decrease of Rs 2,381 Crore of funds from the Centre to the State. Reducing such a whopping sum of funds to the State is nothing but an out and out discrimination. This will have an adverse impact on Telangana development plans.
• The Centre which had cut a whopping Rs 3,731 Crore funds from the share it had announced in the Parliament in 2019-20 financial year, is now proposing Rs 16,726 Crore in 2020-21 Financial Year. But no one knows how much the reduction will be once the proposals are revised later. There is no link between what the Centre is promising to the States and what it is actually releasing as far as the Central funds are concerned. Believing in the Centre’s promises will be highly dangerous, often lead to an unsatisfactory situation.
• The Centre is committing a significant fraud and cheating on the GST front. In the GST Act that was brought in 2017, it was clearly stated that for the State, which registered less than 14 per cent of growth rate, deficit caused by the GST would be compensated for five years. As per this, the Centre owes a compensation of Rs 1,137 Crore to the State. The Centre has not given any clarity on these compensation funds.
• There is a substantial cut in the Centre’s Budget on the funds to be allocated to urban development. With this, the Telangana state, which is witnessing fast urbanization would be adversely affected, and it would suffer a considerable loss. For the urbanization in Telangana State, in 2019-20 Budget, Rs 1,037 Crore was allocated, and it is reduced by Rs 148 Crore in 2020-21 Budget and allocated only Rs 889 Crore. They have cut the Urbanization funds by 14.3 Percent.
• Niti Aayog has recommended to the Centre to allocate Rs 24,000 Crore to the Telangana State for Mission Bhagiratha and Mission Kakatiya programmes. On several occasions, we have requested the Centre to make these allocations. Even then, they did not listen to us. There is no mention of this in this year’s Budget.
• We have incurred huge expenditure to construct significant irrigation projects to supply water to about one crore of agriculture lands in the State. A lot of spending is also needed to maintain these projects. We have requested the Centre’s help in this regard. But the Centre had not allocated any funds.