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Telangana stares at major financial challenges in 2020-21 fiscal
The new financial year of 2020-21 beginning April 1 is all set to pose big financial challenges before Telangana which is already reeling under fiscal crisis in the current year.
Hyderabad: The new financial year of 2020-21 beginning April 1 is all set to pose big financial challenges before Telangana which is already reeling under fiscal crisis in the current year.
Government estimated that the State revenues will drop all-time low under the impact of State lockdown enforced as part of containing the spread of coronavirus.
After the announcement of State lockdown by Chief Minister K Chandrasekhar Rao on March 15 for two weeks till March 31, revenue generation started falling with the closure of major business establishments , stoppage of vehicle registrations, land property registration and decline in liquor sales.
VAT from fuel sales, stamps and registration, levy on vehicle transportation and liquor sales are the main revenue sources for Telangana after the introduction of single Tax regime GST.
Official sources said that the State was already reeling under economic crisis due to slowdown in the current fiscal. The coronavirus scare added "salt to the wound" before the beginning of the new financial year. All the revenue generating sources shut their operations. Reports indicate lockdown will continue till May.
"The chances to meet the monthly expenses incurred to pay the salaries of government employees and pension amount to nearly 40 lakh beneficiaries is remote in the present circumstances.
It required at least Rs 3,000 crore for salaries and pensions alone every month. In addition, the required funds for medical emergency to tackle coronavirus will also be more. Government estimates around Rs 10,000 crore emergency fund to face any eventuality in the coming days.
The big challenge before the government is to purchase all agricultural produce from the farmers in two difficult times. Chief minister K Chandrasekhar Rao already said that government is in talks with RBI to raise nearly Rs 35,000 crore to rescue farmers in the Rabi season.
Another big challenge is providing relief to the small and medium entrepreneurs who will be the worst affected as they lost trade opportunity after the world hit by the deadly virus. The government is preparing a report on the impact of coronavirus on each sector.
