Cash flow to impact Budget spends

Hyderabad: The Telangana State Budget Outlay for 2021-22 financial year is likely to be less than 2020-2021 outlay. The outlay for the current financial year was Rs 1.82 crore. The reason for this likely cut in outlay is due to fall in revenue.

One of the options being examined by the government to overcome the situation arising out of fall in revenue due to the corona pandemic is hike in the Stamp Duty and Registration fees and increase of the Municipal taxes.

This proposal was mooted by officials at the high-level meeting chaired by Chief Minister K Chandrasekhar Rao on Thursday which marked the beginning of budget preparation.

The officials reportedly told the chief minister that the 15th finance Commission also recommended the State to increase the stamp duty to overcome the financial crisis.

At present, the State was collecting 8 per cent stamp duty and it can be increased to up to 15 per cent, the commission suggested.

The Chief Minister analysed the Central budget presented by Union Finance Minister Nirmala Sitharaman on February 1 and also the challenges before the State Government to overcome the financial crisis during the next financial year.

The State had already lost Rs 50,000 crore revenue in the current financial year due to lockdown and its impact on the State finance is still visible. The State has expected a financial package from the Centre to address the precarious financial condition in the next financial year but no such relief was mentioned in the Central budget, top officials said that to compensate the revenue loss , the government already decided to reduce the Budget Estimations (BE 2020-2021) by at least 20 per cent in the Revised Budget Estimations (RE) which is to be made public at the time of presentation of the new budget proposals during the budget session.

Since the government was in no mood to accord top priority to the capital expenditure in view of huge requirement of the funds for development and welfare schemes in the last two years, the State Government wanted to downsize the capital investment again this year and manage the available funds for priority sectors.

As the government is planning to the announce unemployment dole to the youth, new pay scales to the government employees under the new PRC and implement the farm loan waiver scheme, it has started scouting for avenues to mobilise necessary funds.

It is also said that the government was unlikely to propose any new schemes in the budget. The current financial trends indicate that increase of the revenues would not be more than 5 per cent than the current levels.

Taking into consideration all the financial implications, officials said that the total budget outlay in the new financial year would be less than Rs 1.8 lakh crore. The current budget outlay would be not be more than Rs 1.6 lakh crore in the revised estimations.