A welfare Budget

Hyderabad: The first full budget of the Telangana government presented by Finance Minister Eatala Rajender continued its focus on welfare of weaker sections and development of Irrigation, Agriculture and Roads and Buildings. Unveiling the tax-free budget for 2015-16 with a total outlay of Rs 1,15,689 crore, the Finance Minister said, “It is not just a collection of numbers but an expression of our values and aspirations.”

• Eatala presents Budget for 1,15,689 cr
• No allocation for KG-PG education
• Rs 5,547 crore for welfare of Scheduled Castes
• New Industrial Policy to focus on Made in Telangana

He said the revenue surplus budget pegs the fiscal deficit at Rs 16,969 crore. As a percentage of the GSDP, the fiscal deficit will be 3.49 per cent. But interestingly, the budget had not made any allocation for KG-PG free education and there is no mention about the oft-promised two-bedroom housing scheme.

Non-plan expenditure up

The budget – estimating a revenue surplus of Rs 531 crore – said the plan expenditure is Rs 52, 383 crore, while the non-plan expenditure is estimated at Rs 63, 306 crore. The increase in the non-plan expenditure, compared to 2014-15 budget presented in November last year, was mainly due to the increase in pay and allowances of government employees. Eatala said the amount required for salaries and pensions is Rs 22, 889 crore. He did not elaborate as to how he proposes to mobilise the funds under Plan and under Non-Plan.

He said the government had largely remained on track in respect of the Budget Estimates of revenue but for the steep shortfall in the grants from the Centre. The collection of own tax (SOTR) and non-tax revenue (SNTR) is more or less on track as compared with the estimates presented in the 2014-15 budget with the exception of collections under VAT and proceeds from land regularisation. VAT collections remained subdued because of general stagnation in economic growth.

Even while voicing concern at “severe constraints” in raising the plan outlay due to the less than expected tax devolution from the 14th Finance Commission and reduction in plan transfers from the Centre, the minister reiterated that the TRS government “will walk the talk”. “As compared with the Central plan assistance of Rs 11,781 crore projected in the State budget, the amount received till end of February 2015 is only Rs 4,147 crore, indicating a shortfall of Rs 7,634 crore.

This is close to 65 per cent of the budgeted amount,” he said. Similar is the case with non-plan grants of Rs 9,939 crore budget in 2014-15, with the amount received till end of February being only Rs 1,346 crore. The shortfall in the receipt of non-plan grants is over 86 per cent, he said. Eatala said the government had requested the Centre for raising an amount of Rs 4,000 crore as additional borrowings in relaxation of the borrowing limit under the Fiscal Responsibility and Budget Management (FRBM) Act.

The Union government has so far not communicated any decision about such relaxation. Added to this non-receipt of special assistance, CST compensation etc has resulted in shortfall of Rs 20,227 crore. The minister said as far as the welfare schemes and allocation were concerned, the Government would intensify the scheme of land purchase and assigning three acres to the SC women with a provision of Rs 1,000 crore.

“Up to end of January 2015, 1,132 acres of private land and 270 acres of Government land has been sanctioned covering 525 beneficiaries.” With regard to skill development of the SC youth, suitable training institutions are to be identified to not only impart technical skills but also help them with suitable placements. The total provision for welfare of the SCs is Rs.5547.05 crore.

Listing the allocations and schemes for the Scheduled Tribes, Backward Classes, and minorities, the Finance Minister said that there has been considerable reduction in the receipt of transfers from the Centre. On industrial development, the Finance Minister said the new Industrial Policy focused on core manufacturing sectors and is expected to lead to production of high-quality goods at the most competitive prices. Thereby, it will help establish the ‘Made in Telangana-Made in India brand’ as a global recognition. An amount of Rs 973.74 crore is proposed towards payment of industrial incentives in 2015-16.