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Fiscal pain : Government presses austerity button

Fiscal pain : Government presses austerity button
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Tight-fist Centre, rise in scheme expenditure put pressure on State

Hyderabad: The last quarter (January to March) of the current financial year (2019-20) will be a tight rope walk for the Telangana government.

Faced with a tough financial position following the influence of economic slowdown and the delay in the release of state share of the tax collections under the GST from the Centre, coupled with the steep hike in the scheme expenditure, the state government has decided to stop the excess release of funds to several schemes, including the flagship programme - Rythu Bandhu and other important welfare schemes such as fee reimbursement, Kalyana Laxmi, Sheep and Buffalo Distribution, etc with immediate effect.

The government had already put on hold the farmers loan waiver scheme for this year due to lack of funds and the release of funds to Rythu Bandhu, Aarogyasri and KCR KITs is being reduced drastically.

Since the Aasaraa pension scheme and employees' salaries are given top priority, the government will utilise majority of the funds for these two purposes only.

Top officials of the Finance department told The Hans India that Chief Minister K Chandrashekhar Rao at a high-level meeting held on Saturday instructed all the departments to exercise constraint in fund allocations in the fourth quarter of this financial year.

The allocations to Rythu Bandhu and Kalyana Laxmi will be reduced by at least 40 per cent. According to the schedule, the cash incentive distribution should start by November third week. Due to fund crisis, the benefit distribution through online is yet to begin.

While this scheme would cost Rs 7,500 crore, the government is not in a position to earmark more than Rs 3,000 crore. Hence, during Rabi, farmers who possess less than 10 acres of land will only get the benefit.

Similarly, the government will not approve new applications under Kalyana Laxmi and instructed all the welfare departments to stop seeking funds under the scheme until further orders. The pending Aarogyasri bills to the tune of more than Rs 300 crore will also be put on hold.

"The TS government is facing a deficit of nearly Rs 2,700 crore state share from the Central tax. Another Rs 1200 crore deficit was registered due to fall in state income.

By the end of October, the state's overall tax revenue was Rs 43,000 crore and it was Rs 44,200 crore during the corresponding period last year.

The reason for the low income in the tax revenues is the decrease of GST collections. In all, the state is facing nearly Rs 5000 crore financial deficit this year.

On the other hand, the expenditure incurred on welfare schemes mainly on Aasaraa pensions doubled after the enhancement of the benefit to the needy this year.

The old age pension has been increased from Rs 1000 to

Rs 2016. The only option before the government to maintain the fiscal discipline in the next four months is imposing a cap on the release of funds to various departments until the release of Central share in the tax revenues.

Sources said hike in liquor prices is the first choice before the government to get additional revenues.

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