Steep fall in Central aid to Telangana

Hyderabad: In a surprise revelation, the Telangana State is experiencing step-motherly treatment from the Central government in terms of the transfer of funds.

According to the Finance Minister Eatala Rajendra, the government has faced severe constraints in raising the plan outlay in 2015-16 mainly on account of less than expected tax devolution from the award of 14th Finance Commission and the reduction in plan transfers from the Centre.

The estimated tax devolution to the State is only Rs 12,823 crore in 2015-16. The Centre has drastically reduced plan grants to States from Rs 3,14, 814 crore in 2014-15 budget estimates to Rs 1,80,293 crore in 2015-16, he said.

Even in the case of non-plan grants also, there was a fall of 86 per cent over budgeted estimate, as against Rs 9,939 crore the state received only Rs 1,346 crore. The shortfall in the receipt of non plan grants is over 86 percent of the budget estimates.

He said the government requested the Government of India for raising an amount of Rs 4,000 crore as additional borrowings in relaxation of the borrowing limits under the Fiscal Responsibility and Budget Management (FRBM) Act. The Government of India has so far not responded to it, thus reflecting poor
relations with the Union government.

Accordingly, the State had suffered fund crunch to the tune of Rs 20,227 crore, which is beyond the state’s control, he said. The State would have largely remained on track in respect of budget estimates of revenue but for the steep fall in the grants from the Centre. However the collection of own tax and non tax revenue is more or less on track as compared with the budget estimates presented in the 2014-15 budget.

Further, complaining to the Center’s attitude towards states, the finance Minister said that while the Centre budgeted for a fiscal deficit of 3.9 per cent, the States are being asked to comply with the limit of 3 per cent of GSDP.