15th Finance Commission lauds Telangana’s growth

V Rishi Kumar Hyderabad | Updated on February 20, 2019 Published on February 19, 2019


Lauding the State’s growth rate and development model, the Fifteenth Finance Commission has called upon the Telangana government to draw up a medium-term fiscal deficit and debt management plan.

NK Singh, Chairman of Commission, said the State’s growth rate is commendable and its welfare schemes and focus on the development of irrigation sector are particularly impressive.

Fiscal debt

The growth rate the State has achieved in the past few years has been above the national average and the GST collections too have been robust, all pointing towards strong growth numbers. However, the Finance Commission struck a note of caution over fiscal deficit and mounting debt and called upon the State Government to chart out a medium term debt management plan.

Referring to Fiscal Responsibility and Management Management plan that States have to adhere to, the Chairman felt this was necessary for prudent management of finances.

The Commission is on a three-day tour of Telangana and has interacted with various stakeholders, visited some of the irrigation project sites and also met with trade and businesses to assess the progress the State is making in the recent years.

This is the 19th State which the Commission has visited so far and expects to complete the rest of the States soon.

Ease of Doing Business

Referring to the Ease of Doing Business where Telangana ranks second in the country, and also the innovative legislation TS iPass, which seeks to promote industries, the Finance Commission members felt these measures would help in the State’s economic growth and in attracting new investments.

Providing insights into some of the economic issues, the Commission members said that while 50 per cent of the State Gross State Domestic product comes from four districts of Hyderabad, Rangareddy, Medak and Medchal, the rest of the districts account for the rest of the State’s economy. This needs to be looked into and corrective measures taken, they felt.

The Rythu Bandhu scheme of the State government, which seeks to help farmers is a laudable move and this is being replicated in other States, such as the one in Odisha.

Welfare schemes

Referring to the State’s growing focus on welfare measures and higher allocations to these sectors, while the Panel felt there could be some change in approach. However, the State defended this as this would augur well for the economy in the long run.

On fiscal devolution, which was 42 per cent to States as per the Fourteenth Finance Commission, the question on everyone’s mind is whether this works as per plan or this needs to be re-looked into, Singh said.

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Published on February 19, 2019
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