The Telangana government had anticipated Central grants to the tune of Rs. 21,720 crore and a third of compensation of Rs. 22,000 crore for the phase-out of Central Sales Tax to back its ambitious expenditure of Rs. 1 lakh crore in the current year but failed to get both.
Also, the State government had posed to the Centre a request for the grant of Rs. 5,000 crore as special assistance but even this was not considered. Its plans to mobilise Rs. 6,500 crore from the sale of lands in Hyderabad and Ranga Reddy district did not materialise and the request to hike the cap prescribed by Fiscal Responsibility and Budget Management Act (FRBM) from 3 to 4 per cent of Gross State Domestic Product for the purpose of raising loans met poor response as what was proposed to be conceded was only 0.5 per cent.
It is in these circumstances that the State government will present its second full-fledged budget on March 11 with a thrust on welfare and flagship programmes – Mission Kakatiya and Water Grid to supply drinking water to each household.
Officials of the Finance Department were tight-lipped on the size of the budget and said it would be known only at the Cabinet meeting an hour or so before the presentation to the Assembly.
The government had estimated total receipts of Rs. 98,099 crore to fund its expenditure in the year but its own tax receipts were projected to be Rs. 35,378 crore and non-tax revenue Rs. 13,242 crore. A large chunk of the remaining amount was to come from the four sources above that did not yield results.
Officials were also sore that the bifurcation of loans borrowed by the undivided State was not completed, which was the reason why the government groped in the dark about its entitlement to fresh borrowings.
It was roughly estimated that Telangana’s outstanding balance could be around Rs. 67,000 crore. By this assumption, it was entitled to another Rs. 68,000 crore going by the 3 per cent cap prescribed by FRBM. In the current year, however, the government estimated its fiscal deficit and gap funding at Rs. 17,398 crore or 4.79 per cent, which was much higher than 3 per cent.
