Telangana state: 8 out of 10 districts are backward

Hyderabad: According to the sources, the memorandum submitted by the Telangana state government to the 14th Finance Commission pointed out that many dealers reported sales only in Hyderabad though the products were sold all over undivided AP, creating a false picture that Hyderabad has a huge revenue-generation potential. Also, Telangana state government panics that the number of people visiting Hyderabad will plunge drastically and there is likely to be an ensuing fall in sales of petroleum products and other commodities. As far as the statistical records are concerned, Hyderabad accounted for nearly 80% of the VAT collected in undivided AP, creating this erroneous impression about the revenue potential.

With limited revenue potential of eight of the ten backward and drought-prone districts and imminent erosion of the tax base in the remaining two districts, the fiscal scenario is bleak and a matter of serious concern. It also predicted that Telangana's carve up in the total tax base of erstwhile united AP was around 44%. The state government urged the commission to take into account erosion of tax base and increase in the establishment expenditure of the new state and allocate more funds.