Bhatti pours out financial woes of state before FM

Hyderabad: Deputy Chief Minister Bhatti Vikramarka poured out the state’s financial woes before Union Finance Minister Nirmala Sitharaman at a pre-Budget meeting organised with Finance Ministers of all states in New Delhi on Saturday.

The Deputy CM sought additional funds and grants in the upcoming Union Budget as well as sanction of pending key projects, including the second phase of Hyderabad Metro Rail; IIM in Hyderabad; airports at Peddapalli, Warangal, Adilabad, and Kothagudem; and semiconductor project. Besides, he urged the Union Finance Minister to declare the Palamuru Rangareddy Lift Irrigation (PRLI) Scheme as “a national project”.

In his speech, Bhatti said: “We need to increase our capital investment rate from the present 37 per cent to 50 per cent of GSDP. It is necessary to enhance the fiscal deficit targets to at least 4 per cent of GSDP per annum. In addition, the 50-year interest free loans given to States may be converted into grants and the amount of assistance may be doubled from the current levels. He brought to the attention of the Union Minister that the state government is constructing more than 1,000 residential schools and requested the Centre to exempt the state from FRMB Act restrictions to enable it to get additional funds.

Referring to the devolution of tax, Bhatti said that though the recommended share of tax devolution to States by the Fifteenth Finance Commission is 41 per cent, the States have been getting only 30 per cent of the gross tax revenues of the Centre as tax devolution.

The Deputy CM raised another aspect regarding state’s resources, which arises due to the rate reduction under GST 2.0. “It may boost demand, but it is doubtful, if this can be sustained year after year. It is expected that states’ revenues under GST may decrease due to rate reduction; so, a suitable mechanism needs to be put in place to compensate the States for loss of revenue”, he said. Recently, the Union government, without any consultation with States, replaced the MGNREGS by Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G Scheme). As per the new Act, the funding of the Centre-state scheme has been modified from 90:10 to 60:40 respectively, thus imposing additional burden on already strained resources of the states. “This is entirely against the spirit of cooperative federalism and starves states of funds meant for capital outlay which is essential for maintaining growth momentum,” he observed.

Bhatti appealed to the Union Minister to sanction the RRR (Regional Ring Road) project at the earliest. Electronics Manufacturing Cluster 2 should also be sanctioned to Telangana; for, land for this project has already been identified near Thatiparthy village in Rangareddy district, he stated.

The Deputy SM listed several other representations made by the state, including Rs 45,000 crore for radial roads, Rs 14,100 crore for Musi River Front Development Project, Rs 17,000 crore for greenfield highway from Hyderabad to Amravati via the Bharat Future City, Rs 2,677 crore for a new railway line from Vikarabad to Krishna in Telangana, high speed rail corridors from Hyderabad to Chennai, and Rs 17,212 crore for sewerage plan in Hyderabad etc., adding they may be positively considered.