Congress Demands Revised, "Realistic" State Budget

Senior Congress leader and former minister Mohammad Ali Shabbir today demanded that the Telangana Government come up with a revised budget for the ongoing financial year in view of "changed circumstances" since the release of the original 2021-22 budget.

"Finance Minister T Harish Rao had presented a budget of Rs 2.31 lakh crore for 2021-22 on March 18. Immediately after its presentation, the Congress had pointed out that the budget was unrealistic and its figures on revenues were too speculative. Several factors, including the Covid-19 situation, had not been taken into account while the preparation of the budget. The first quarter of the current financial year is about to conclude and the state exchequer is almost empty. As a result, the state government is primarily dependent on borrowings and sale of lands to meet its fiscal immediate needs, like the payment of salaries, pensions, subsidies and other expenditures," Shabbir Ali said in a media statement.

Elaborating further on the matter, he added, "The total revenues of the state in the month of April was just Rs 1,925 crore - a mere 4.24% of the estimated revenues for the entire year, mentioned in the budget as Rs 2.21 crore. The collection was even worse in the months of May and June due to the lockdown. With experts predicting a third wave of Covid-19 in the month of October or perhaps sooner, the economy is not likely to get back on its feet in the near future. Therefore, it will be ideal for Chief Minister K Chandrashekar Rao to hold consultations with economists and financial experts and come up with a revised budget for the year immediately."

The Congress leader then urged the CM to adopt a "realistic approach" in dealing with the state's finances, and asserted, "The financial management of a state is a huge responsibility as it impacts the lives of crores. Therefore, it must be handled with utmost care and precision. Telangana is currently caught in a huge debt trap with borrowings of nearly Rs 5 lakh crore, which includes the loans taken by various corporations. The state government took huge loans from several agencies at high interest rates without sparing a single thought to the long-term implications of such borrowing. Consequently, the government is spending about Rs 17,584 crore only on the payment of the interest for these loans. This amount is almost equal to the combined expenditure on pensions and subsidies (approximately Rs 10,831 crore and Rs 8,721 crore respectively). The government can overcome a crisis in the short-term by borrowing a huge loan from some agency. But this will push the present and future generations of Telangana into huge debt for several decades. This means that the hard-earned money of tax-payers will be wasted on non-productive purposes for years to come."

"The TRS regime took loans of Rs 45,638 crore as against the budgeted borrowings of Rs 33,191 crore in the year 2020-21 after the Centre increased the FRBM limit to 5%. This year too, the regime proposed to borrow Rs 45,509 crore in the budget. But now, it wants to borrow an additional Rs 12,000. For this, it has asked the Centre to increase the FRBM limit once again. Apart from this, it wants to raise another Rs 20,000 crore by selling off government lands. It is time the state government take prudent steps to improve the state's financial condition," he added.

After outlining the alleged financial crisis facing Telangana, Shabbir Ali urged the CM to release a white paper on Telangana's financial condition in the state Assembly, providing clarity on both past and proposed loans. He also demanded that the CM give a complete break-up of how the borrowed loans had been utilised as well as the government's plan to repay the loan amounts and the interest.