‘Prevent Telangana from falling into debt trap’

Telangana Chief Minister K. Chandrashekhar Rao.

Telangana Chief Minister K. Chandrashekhar Rao. | Photo Credit: NAGARA GOPAL

Forum for Good Governance (FGG) has requested Chief Minister K. Chandrasekhar Rao to review the welfare schemes being implemented in the State, stating that ‘hyper populist polices’ of the government are leading to heavy borrowings. There is an urgent need to to review the welfare programmes to prevent the State from falling into a debt trap, it said.

“Chief Minster K. Chandrasekhar Rao is on record stating that the welfare programmes he has introduced are an example for other States to emulate. FGG appreciates some of the welfare measures being implemented in the State. At the same time, there are some schemes which are not essential and are not generating revenue. Heavy borrowing to sustain the hyper populist welfare measures is costing the economy dearly and, in the long run, may lead to disaster,” said FGG secretary M. Padmanabha Reddy said in a letter addressed to Mr Rao on Thursday.

Citing the example of countries that plunged into deep economic trouble due to the heavy populist social welfare policies, Mr Padmanabha Reddy further wrote, “Venezuela is a developing country. It has world’s largest known oil reserves and has been one of the world’s leading exporters of oil. Excessive welfare measures and poor policies of the government led to the collapse of its entire economy. Most observers cite anti-democratic governance, corruption, mismanagement of the economy, socialist, populist or hyper populist nature of the government policies to maintain political power as the causes for the collapse of Venezuela’s economy.”

Referring to another example, he said Greece, the cradle of western civilisation and birth place of democracy, philosophy, theatre and the Olympic Games, is a developed country with an advanced high-income economy and a high quality life today. “During the last 20 years, over-spending on welfare measures has pushed the Greece into serious financial problems, making it bankrupt. The crisis in Sri Lanka is a stark reminder of how mismanagement of economy leads to serious conditions and unrest in the country,” the letter read.

He pointed out that a few senior bureaucrats of the Central government recently brought to the notice of Prime Minister the way a few States were doling out freebies at the cost of their respective economy and Telangana was one of them.

“To prevent financial troubles, there is a need to review the welfare programmes. Likewise, the administrative expenditure needs to be pruned. The tax-payer’s money should be used for developmental works. The CAG, in his audit report for 2020-21, says that Telangana has been persistently trailing in respect of expenditure on education and health when compared to the other general states,” said Mr. Padmanabha Reddy, requesting the Chief Minister to stop borrowing loans to fund the hyper populist programmes and increase allocations to health, education and infrastructure development.

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Printable version | Apr 7, 2022 8:39:59 pm | https://www.thehindu.com/news/cities/Hyderabad/prevent-telangana-from-falling-into-debt-trap/article65299725.ece