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Estimating a huge shortfall in State own revenues and funds from the Centre due to coronavirus pandemic induced lockdown, the Telangana Chief Minister K Chandrasekhar Rao has initiated a mid-term review of State finances and the State Budget for 2021-22.
The Telangana Finance Ministry has estimated that the loss to the State due to the pandemic at ₹52,750 crore.
Officials of the Finance department briefed the Chief Minister about the prevailing financial situation. According to them, the State received ₹39,608 crore revenue for seven months from April to October for the financial year 2019-20 through taxes and other non-tax resources.
Budget proposals
The 2020-21 Budget proposals were prepared estimating that the State’s revenue growth rate would be 15 per cent. But due to Covid-19, the growth did not reach 15 per cent and on the contrary the revenues fell compared to last year.
In 2020-21 financial year, it was estimated that the State would receive ₹67,608 crore income through taxes and non-tax resources and the Budget proposals were made accordingly. But as per the current estimates, the chances for this year are only ₹33,704 crore as the income. With this, the State’s own income will be reduced by ₹33,904 crore. The State government’s share in the Central taxes has also decreased considerably.
In the Union Budget, it is mentioned that for 2020-21 financial year, the Centre would allocate ₹16,727 crore to the State as its (State’s) share. According to this, Telangana should get ₹8,363 crore for the financial year 2020-21 from April to October. But it received only ₹6,339 crore from the Centre. As on date, there is a reduction of ₹2,025 crore in the taxes.
The State estimated a loss of ₹5,000 crore and sought ₹1,350 crore towards interim relief from the Centre. The officials informed the Chief Minister the State is yet to receive financial assistance from the Centre towards the recent floods and rain in the State and Hyderabad.
As per estimates, since 2014 Telangana’s contribution to the Centre in the form of taxes was ₹2,72,926 crore. However, the Centre has released ₹1,40,329 crore to the State.
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