Telangana ignored in Union Budget again

Continuing its blatant discrimination against Telangana, the Bharatiya Janata Party-led Centre once again cold-shouldered the country’s youngest State in the union Budget, standing it up against the possibility of a severe shortfall in Central funds for development and welfare schemes. The fund deficiency that Telangana will be forced to tackle in 2023-24 due to this is expected to be of around Rs 35,000 crore to Rs 40,000 crore.

The decline in allocation of funds is likely to have an adverse impact on the State’s overall revenue receipts as well with the Centre, under the guise of reforms and improved schemes, reducing allocations to States. Save for one sentence promising support to the Indian Institute of Millet Research in Rajendranagar as a Centre of Excellence, there is no mention of Telangana in union Finance Minister Nirmala Sitharaman’s budget, neither is there any response to the State’s requests.

The slashing of funds for crucial Central schemes is also expected to hit the State. For instance, funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) were reduced from Rs 89,400 crore in 2022-23 to Rs 60,000 crore in 2023-24.

Similarly, massive cuts were imposed in food security schemes for the poor, with allocations reduced from Rs 2,87,194 crore in 2022-23 to Rs 1,97,350 crore in 2023-24.

As in last year’s budget, when not one of 157 medical colleges sanctioned across the country were given to Telangana, this year too, none of the 157 nursing colleges announced will come to Telangana.

As assured in the Andhra Pradesh Reorganization Act, Telangana was due to receive Rs 1,350 crore towards backward areas development. However, no funds were allocated to the State, when Rs 5,300 crore was sanctioned for development of drought-prone and backward areas in Karnataka for the Upper Bhadra project.

“Instead of giving the rightful funds to Telangana as per the Act formulated by the Parliament, priority has been given to Karnataka, where elections will be held in a few months. This is a completely biased attitude,” Finance Minister T Harish Rao said, pointing out that even allocations for minorities were slashed from Rs 5,020 crore in 2022-23 to Rs 3,097 crore now.

The incentive of enhancement of 0.5 percent fiscal deficit to States was of no big use to the State which has already refused participate in the power sector reforms as mandated by the Centre to avail the provision, he said, stating that this meant Telangana would lose Rs 6,000 crore.

A strong pitch made by Harish Rao prior to the budget to bring down the share of cesses and surcharges as a percentage of gross tax revenue to a level not exceeding 10 percent, also went unheeded.

“The 15th



Finance Commission has recommended to the Centre to devolve 41 percent of total taxes collected to the States. But the Centre is now blatantly violating these recommendations through its own revised budget estimates for 2022-23. While the Central tax collections were estimated at Rs 33,68,858 crore in 2022-23, the States’ share is now estimated at Rs 10,21,488 crore, which is only 30.4 percent of the total tax revenue collected by the Centre,” Harish Rao said.

He pointed out that by imposing more cess and surcharges which are not shared with the States, the Centre was denting the States’ revenues. While the Centre claimed to have increased the States’ share in Centrally Sponsored Schemes, it had in fact reduced the number of such schemes.

While funds to local bodies should be released strictly as per recommendations of the 15th Finance Commission, Sitharaman has imposed a cut and done serious injustice to rural and urban local bodies, he said, pointing out that as against Rs 22,908 crore proposed for urban local bodies in 2022-23 budget estimates, the Centre had now revised estimates to Rs 15,026 crore imposing a 34.4 percent cut. Budget estimates proposed for rural local bodies was reduced from Rs 46,513 crore in 2022-23 to Rs.41,000 crore.

“With these cuts, the Central government is belittling urban and rural local bodies. Against the recommendations of the Finance Commission, the funds allocated to the health sector too were reduced from Rs 13,192 crore in the 2022-23 budget estimates to Rs 8,895 crore,” the Minister said.

In a statement issued here, Harish Rao said the Centre proposed a net debt of Rs 17,86,816 crore in its budget for 2023-24. Out of this, a lion’s share of Rs 8,69,855 crore was proposed to cover the revenue deficit. “Spending 48.7 per cent for non-capital expenditure could prove dangerous to the country’s economy,” he said, also expressing concern that while States comply with the Fiscal Responsibility and Budget Management norms, non-compliance by the Centre could undermine fiscal discipline of the country.

Sitharaman has also ignored requests from the State government including national status for Kaleshwaram or Palamuru Rangareddy Lift Irrigation Schemes and also to allow States to choose Centrally Sponsored Schemes as per their requirements.

Where Telangana will be hit:

• Allocations for PM-KISAN Nidhi reduced from Rs 68,000 crore in 2022-23 to Rs.60,000 crore in 2023-24

• Number of beneficiary farmers reduced from 11.27 crore to 8.99 crore

• Fertilizer subsidy reduced from Rs 2,25,220 crore in 2022-23 to Rs 1,75,100 crore in 2023-24

• Rashtriya Krishi Vikas Yojana allocation reduced from Rs 10,433 crore to Rs 7,150 crore