Centre owes Rs 1,05,812 crore to Telangana: Harish Rao

The union government owes Rs 1,05,812 crore to Telangana in the form of pending funds, grants and compensation. If paid as per norms and recommendations, the State government can clear one-third of its Rs 3.29 lakh crore of State debts.

“Let alone clearing debts, we would not even were required to obtain loans, if the Centre released these funds till date,” said Finance Minister T Harish Rao, while explaining the adverse impact of the Centre’s unilateral decisions and imposing restrictions against the State to obtain loans under Fiscal Responsibility and Budget Management (FRBM) limits.

He was participating in the short discussion on “Central government dual policy in implementation of FRBM Act – Impact on State progress” in the Assembly on Tuesday. He offered to felicitate the BJP MLAs and MPs on behalf of the State government, if they succeed in getting the dues from the Centre.

The Finance Minister said the Central government was adopting double standards in implementation of the FRBM Act by imposing restrictions on the States, but not practicing them itself. While the 15th Finance Commission recommended for constituting a high-powered inter-governmental committee comprising the Central and the State governments to review the borrowings, the union government took unilateral decision to impose restrictions on the States borrowings without constituting the committee. Further, these restrictions are being imposed with retrospective effect.

Harish Rao stated that though Telangana was eligible to avail loans upto 4 per cent of its GSDP, it had let go 0.5 per cent of loans for the sake of farmers, after the Centre insisted on fixing smart meters at agricultural pump sets. The union government also ignored the 15th Finance Commission’s recommendations to release Rs 6,268 crore to Telangana under various heads based on its performance.

“Through GST implementation, Prime Minister Narendra Modi promised to increase the tax share of States from 32 per cent to 42 per cent. But by imposing more cess, it has reduced the tax component to the State,” the Finance Minister said. 

While the Central government



was accrueing around 22.26 per cent of its revenue through cess and surcharges, the States are losing their revenue and ending up with only 29.6 per cent of total revenue earned by the Centre.

Harish Rao asserted that unlike the union government which obtained loans to repay its loans, the State government spent the borrowings on capital expenditure and created assets. “We took up irrigation projects like Kaleshwaram project, Mission Bhagiratha, Mission Kakatiya and other programmes which in turn created assets for the State,” he added. As per the Reserve Bank of India report, Telangana’s debt rank is 23rd in the country.

In the last eight years, Telangana assumed top position in terms of increase in State-owned-tax-revenue with 11.5 per cent growth. Odisha came second with 9.7 per cent, followed by Haryana with 9.2 per cent growth. Similarly, Telangana’s contribution to GDP increased from 4 per cent to 4.9 per cent in last eight years, despite having just 2.9 per cent of nation’s population.

“We improved the State’s wealth and distributing among the poor, unlike the BJP government which waived off the corporate loans to benefit its friends,” he said. He reminded that the Comptroller and Auditor General (CAG) found fault with the union government for obtaining off-budget loans which amounted to about Rs 6 lakh in the last five-six years.

The Finance Minister also rubbished the allegations by union Finance Minister Nirmala Sitharaman and other BJP leaders over the per capita debt on each citizen of the State. He stated that while the Central debts resulted in the per capita debt of Rs 1,25,679 on every individual, the Telangana State debts amounted to Rs 94,272 per capita. He accused the BJP for destroying the federal spirit to achieve its motto of “Weaker States, Stronger Centre”.

To sum up the performances of the Central and the State governments in last eight years, Harish Rao said while Telangana government achieved “Saaphalyam, Sankshemam, Saamarasyam” (success, welfare and harmony), the BJP made “Viphalam, Visham and Vidvesham” (failure, poison, hatred) as its policy.