Finance Minister T. Harish Rao told the Legislative Council on Sunday that there would be further cut of about ₹1,400 crore in the devolution of Central funds to the State following the latest reduction in Corporate Tax announced by Union Finance Minister.
During his reply to the debate on the Appropriation Bill, he explained that reduction in taxes would reduce the Centre’s revenue by about ₹1.45 lakh crore for 2019-20. As the Centre would devolve 42% of its revenue to States and as Telangana would get 2.47% of the total devolution, it would translate into about ₹1,400 crore.
As the Centre’s announcement had come after the State’s budget presentation, it would have a proportional impact on the State’s budget estimates too, Mr. Harish Rao said while responding to a plea by MIM member Syed Aminul Hasan Jafri for allocation of funds for Constituency Development Programme fund as no allocation was made this year. The Finance Minister said the provision of ₹100 crore made was to clear the works already sanctioned by the legislators.
No CDP funds
The government would, however, consider releasing more funds if there was any turnaround in the economic slowdown being experienced across the country, Mr. Harish Rao said adding that no fresh sanctions would be given for CDP works this year.
On Congress member T. Jeevan Reddy’s observation of increasing debt, Mr. Harish Rao said the borrowings were well within the limits prescribed by the Finance Commission guidelines and Fiscal Responsibility and Budget Management norms. The total borrowings of Telangana stood at 20.04% of the GSDP against the limit up to 25% but about 15 other progressive States had higher borrowings with Punjab’s debt standing at 42% of its GSDP in the first place and Gujarat at 21% of its GSDP above Telangana.
He explained that at the time of Telangana formation, the debt share of the State was ₹75,577 crore and they had borrowed ₹1,57,351 crore more during the last five years. However, they have repaid ₹29,198 crore and which meant that the net borrowing was only ₹1,28,153 crore in addition to security (guarantee) given by the government for borrowings by special purpose vehicles and corporations. Further, he stated that all the loans were being used for capital expenditure.
The Minister also stated that Kaleshwaram water would be taken to Suryapet district this year itself from Lower Manair Dam to fill tanks. Members M.S. Prabhakar Rao, B. Venkateshwarlu and K. Damodar Reddy (all TRS), N. Ramchander Rao (BJP) and A. Narsi Reddy (Independent) also spoke as part of the debate.
