Hundreds of Panchayats in Telangana, which always live in perennial cash crunch, have raked in ₹16 crore in just four days. And, the Greater Hyderabad Municipal Corporation (GHMC) has amassed over ₹120 crore in as many days, as people are coming forward to pay the bills and property taxes in old currency.

But this does not bring much cheer to the State government, because all other money-earning departments have witnessed a sharp fall in collections. It is actually sulking with the Centre’s demonetisation move with strong reasons to boot. It feels that it will adversely impact the exchequer in the months to come.

Not many States have openly opposed the currency revamp issue. Telangana Chief Minister K Chandrasekhara Rao joins West Bengal Chief Minister Mamata Banarjee and Delhi Chief Minister Arvind Kejriwal in expressing displeasure over the Modi’s November 8 announcement. He, however, has decided not to take a confrontational approach like the other two Chief Ministers did.

“We have seen a drop in revenues from all the major departments. The departments of Stamps and Registration, Commercial Taxes and Excise – all have reported a sudden drop. Not a single transaction happened in real-estate after the Prime Minister announced the demonetisation move,” a government official said.

“We dynamically monitor collections across all the departments and e-Seva and Mee-Seva. We have seen a huge drop and we don’t see any hope in the next few weeks,” he said.

The State, which recorded huge growth in revenues in the first six months, now worries that there would be a significant drop in the next six months of this financial year.

This might even impact the payment of salaries to the government employees. Though he has not made comments publicly, the Telangana CM had reportedly told Governor ESL Narasimhan that the decision would do harm to the new State. He felt that the decision would reduce the pace of various developmental activities due to the sudden halt to currency circulation.

The State is worried that the decision would hit the discretionary spending by the public. This, it feels, would have an adverse impact on the real-estate business, which has just begun to pick up. “It has already impacted sales in the twin cities, the growth engine of the Telangana economy. We expect this to have cascading impact on the VAT collections,” an official of the Commercial Taxes Department said.

The Chief Minister reportedly said that the decision was ill-thought out. But like all other governments, the government is in a situation. It can’t openly criticise the decision as it would not go well.

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