Inflation Trends in Bangaru Telangana

​Trends in Inflation

Inflation in India is usually measured by Wholesale Prices Index (WPI) and Consumer Prices Index (CPI). Data on CPI (Industrial Workers) is available for Telangana State during 2011-12 to 2015-16. Trend in CPI (IW) indicates that inflation in Telangana is moving in same line as that of all-India (see Figure 2.7).

Figure 2.7: Comparison of CPI (Industrial Workers) inflation in Telangana and India

High Inflation was observed during the years 2012-13 and 2013-14 and exhibited a downward trend in the following years. CPI (IW) inflation came down to 4.3 from in the year 2015-16, giving a sign of relief to the consumers.

IV. Public Finance

Public (Government) investment is an engine of economic development. Government spending on programmes/schemes create what is called as "public goods" such as infrastructure facilities, education, healthy and skilled labour force, clean environment, disease-free society etc. The positive externalities emitted out of these 'public goods' create conducive environment for private investments. Therefore, some of the developmental theorists advocate that Governments in developing countries should inject large public investment in education, health, infrastructure etc. to bolster economic growth. In fact, Government spending could only turnaround the economy in times of economic recession. Since its formation, Government of Telangana has been making sincere efforts to mobilise resources for filling-up critical developmental gaps.

1. Revenue Mobilisation:

Information on Telangana's public finances is available for 2014-15 (both Budget Estimates and Actual) and 2015-16 (Budget Estimates). Total receipts of Telangana during 2014-15 (Actuals) were Rs. 60,699 crore (for the period 02.06.2014 to 31.03.2015) as against the Budget Estimates of Rs. 98,099 crore. Of the total receipts in 2014-15 (Actuals), tax revenues (including share of Central Taxes) occupies major share with Rs. 37,477crore. The total receipts in 2015-16 (BE) is estimated to be 1,15,686 crore (See Table 2.5).

Table 2.5: Receipts on Consolidated Fund of Telangana (Rs. in Crore)

Sl. No	Particulars	2014-15* (Budget Estimates)	2014-15* Actuals	2015-16 (Budget Estimates)
I	Revenue Receipts (1+2+3)	80,090	51,042	94,132
1	tax revenue (including share of Central Taxes)	45,128	37,477	59,318
2	Non-Tax Revenue	13,242	6,447	22,413
3	Grant-in-aid from Central Government	21,721	7,118	12,400
II	Capital Receipts	18,008	9,657	21,555
Total Receipts (I+II)		98,099	60,699	115,686

Note: *2014-15 data pertains to 02.06.2014 to 31.03.2015.

2. Major Taxes for the State:

An analysis of State tax resources reveal that sales tax is the predominant contributor to the State tax resources with 75 percent contribution, followed by State Excise with 10% contribution, Taxes on Motor Vehicles 6 percent and Stamps and Registration with 7 percent (see Figure 2.8).

3. Expenditure Pattern:

Functional classification of total expenditure reveals that in the year 2014-15 (Actuals), highest budget spending of Rs. 24,978 crore was incurred on 'economic sector' consisting of agriculture, rural development, irrigation, energy, industry, transport etc. followed by 'social sector' and 'general services'. Similarly, Budget of 2015-16 provided higher allocations for 'economic and social sector' (see Table 2.6).

Table 2.6: Expenditure by Function and Nature (Rs. crore)

Sl. No	Particulars	2014-15* (Budget Estimates)	2014-15* Actuals	2015-16 (Budget Estimates)
1	General Services	25,661	14,570	29,108
2	Social Services	34,563	20,834	39,741
3	Economic Services	40,414	24,978	46,840
Total Expenditure (1+2+3+4)		100,638	60,382	115,689

Note: *2014-15 data pertains to 02.06.2014 to 31.03.2015.

OUTLOOK

Telangana State has been outperforming many of the Indian States in terms of economic indicators. Specifically, the State has performed very well in terms of per capita income and GSDP growth. The present Government has undertaken sector-specific initiatives to further improve business environment in the State.

G.Rajendera Kumar