The State government has launched preparations for presentation of annual budget to the Assembly in February-March, setting a deadline of January 10 to all the departments to submit their revenue and expenditure estimates.
Without hazarding a guess on the size of the budget, a senior official told The Hindu that the budget for 2018-19, which is to be prepared, will be significant for at least three reasons as it will factor in Goods and Services Tax that came into force six months ago, the fact that the State will move into the election year and the constitution of the 15th Finance Commission two months ago.
Significantly larger
Sources said the budget was expected to be significantly higher than the present year to give the government elbow room to launch populist schemes before going to polls. Moreover, the State would be moving closer to the expectations of Chief Minister K. Chandrasekhar Rao that its budget would cross ₹2 crore mark by 2019-20.
The government had already presented a budget of nearly ₹1.5 lakh crore this year and, therefore, it was safe to assume that it would be anywhere around ₹1.75 lakh crore next year, officials said.
They added that the State was well on course to spend the budgeted ₹1.5 lakh crore aided by comfortable growth margins. The tax revenue grew by 17% and non-tax by 29%. The overall revenue growth was 18% and growth in total receipts 12%. “As we are already in the last quarter of the financial year, the expenditure, ₹75,000 crore till a couple of months ago, will be speeded up by clearing pending bills.”
The State government, as usual, banked heavily on commercial taxes, excise and registration to mop up resources though registration of lands was sluggish post-demonetisation.
Finance Commission
In the year to come, the government has expected a growth in tax devolution by the 15th Finance Commission which could boost its coffers. It based its assumption on the commission’s proposal to judge States for tax devolution by performance indicators and based on the 2011 population.
The 14th Finance Commission fixed Telangana’s share in Central taxes at only 2.44% on the basis of the 1971 population. The State has got the entire quantum of money projected by the FFC, it was stated.
GST impact
The GST, which will be another major factor in the preparation of budget, has yielded the State about ₹7,500 crore since August when the collections began and an additional ₹170 crore as compensation from the Centre for revenue loss arising out of implementation of the new regime.
The State budget will factor in the Centre’s commitment to payment of compensation till June 2022, sources said.
