The Honourable Chief Minister K Chandrashekhar Rao criticised that the 2020-21 Budget proposals introduced by the Centre on Saturday are totally disappointing. The CM has expressed anxiety that the Centre’s Budget allocations may adversely affect the development of the Telangana State, which is a progressive state. He alleged that the Centre has shown discrimination against the Telangana State by imposing severe cuts on the funds to be released to the State. He said it was atrocious that the Centre had reduced the ratio of the State in the Central taxes. He said there is a danger of having funds scarcity for several welfare and development programmes, schemes in the State due to the heavy cuts in the Central funds.
The CM held a four-hour long discussion with the senior officials at Pragati Bhavan here on Saturday on the Central Budget proposals and their affect on the State. In this context, the CM has expressed the following views on the Central Budget.
• It was a Constitutional Right of every State to have a share in the Central Taxes. In the 2019-20 financial year, Rs 19,718 Crore was rightful due from the Centre to the Telangana State. In the last Budget the Centre had announced that this amount would be paid to the Telangana State. But in the revised estimates, it was reduced to Rs 15,987 Crore. With this, in the present financial year, among the funds due from the Centre, there is a reduction of Rs 3,731 Crore. In anticipation of obtaining Rs 19,718 Crore this also led to the State Financial planning going awry as the Centre imposed cuts in the release of funds to the State.
• It is a sheer incompetence of the Centre to decrease the ratio of the State in the Central funds given to the States. There is a need to collect taxes in 2019-20 and release the share of funds to the States. On every occasion, the funds are paid to the States according to the proposals declared in the Budget. There were occasions when there was a variation of one or half percent. But reducing the funds to the tune of a whopping 18.9 per cent in 2019-20 clearly demonstrated the Centre’s faulty fiscal management. This had adversely impacted the Telangana State severely.
• In the 2020-21 Budget proposals, on the funds to be allocated to the Telangana State, there will be a two type’s loss to the State. The Centre has accepted the proposals given by the 15th Finance Commission reducing the State’s share of funds from 42 per cent to 41 per cent. The second one is in the past Telangana State was given 2.437 per cent of share and this financial year it was reduced to 2.133 per cent. With this, there will be direct decrease of Rs 2,381 Crore of funds from the centre to the State. Reducing such a whopping sum of funds to the State is nothing but an out and out discrimination. This will have an adverse impact on the Telangana development plans.
• The Centre which had cut a whopping Rs 3,731 Crore funds from the share it had announced in the Parliament in 2019-20 financial year, is now proposing Rs 16,726 Crore in 2020-21 Financial Year. But no one knows how much the reduction will be once the proposals are revised later. There is no link between what the Centre is promising to the States and what it actually releasing as far as the Central funds are concerned. Believing in the Centre’s promises will be highly dangerous often lead to a futile situation.
• The Centre committing a great fraud and cheating on the GST front. In the GST Act that was brought in 2017, it was clearly states that for the State, which registered less than 14 per cent of growth rate, deficit caused by the GST would be compensated for five years. As per this, the Centre owes a compensation of Rs 1,137 Crore to the State. The Centre has not given any clarity on these compensation funds.
• There is a substantial cut in the Centre’s Budget on the funds to be allocated to the urban development. With this, the Telangana state which is witnessing a fast urbanization would be adversely affected and it would suffer a huge loss. For the urbanization in Telangana State, in 2019-20 Budget, Rs 1,037 Crore was allocated and it is reduced by Rs 148 Crore in 2020-21 Budget and allocated only Rs 889 Crore. They have cut the Urbanization funds by 14.3 Percent.
• Niti Aayog has recommended to the Centre to allocate Rs 24,000 Crore to the Telangana State for Mission Bhagiratha and Mission Kakatiya programmes. On several occasions, we have requested the Centre to make these allocations. Even then, they did not listen to us. There is no mention of this in this year’s Budget.
• We have incurred huge expenditure to construct major irrigation projects to supply water to about one crore of agriculture lands in the State. A lot of expenditure is also needed to maintain these projects. We have requested the Centre’s help in this regard. But the Centre had not allocated any funds.
• Though the Telangana State had requested the Centre for financial help to many welfare programmes being implemented for the people, there were no allocations worth made for these programmes in the Centre’s Budget.
Cut for all the major sectors: KCR
The CM said that the Centre had imposed heavy cuts on the funds to be given to the States. This will cause a heavy damage to the development activities in the States.
“The reduction of funds towards state share from 42 per cent to 41 per cent will cause loss to all the States. The Centre is not showing any commitment in the implementation of the GST. The Centre did not fulfil its statutory commitment of paying GST compensation to the States, which registered below 14 per cent growth rate. The Centre had not announced any progressive measures to get over the economic recession that the country is going through for the past several months. The Centre has not taken any decision to put the country’s financial situation back on the track. It is a regressive measure to cut the allocations to all the sectors. Allocations have been decreased for the Agriculture, Education, Health, Rural development and other key sectors. This will adversely impact the country’s development and its sociological progress,” the CM said.
• For the agriculture sector, in 2019-20, 3.65 per cent funds were allocated while in 2020-21 financial year; the allocation is 3.39 per cent only.
• For Medical and Health, in 2019-20, the allocations were 2.24 per cent while in 2020-21; it is 2.13 per cent only.
• For the Rural Development, 4.37 per cent of funds allocated in 2019-20 while it is 3.94 only now.
• For the education sector, in 2019-20, 3.37 per cent of funds were allocated while in 2020-21; it is only 3.22 per cent.
• In the review meeting, Government’s Chief Advisor Rajiv Sharma, Chief Secretary Somesh Kumar, Principal Secretary (Finance) Ramakrishna Rao, CM Principal Secretary S Narsing Rao, Secretary Ms Smita Sabharwal, Special Secretary Bhoopal Reddy and others participated.
