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With restrictions from the Reserve Bank of India (RBI) and the Centre on mobilising financial resources, Telangana Government is looking at augmenting revenue from its own sources.
“We have to generate our own resources within the latest set of norms. We are working out our mechanism to generate resources internally by increasing revenues from the registration of stamps, excise and asset monetisation, among others,’‘ a senior official from the Telangana government told BusinessLine.
Hinting that the move is more political, the official said, “We will continue our dialogue with the Union government to find ways out. However, we cannot sit idle too. Projects have to be completed, work has to be done.”
Things turned tough for Telangana when RBI refused to permit the State to participate in the open auction market borrowings scheduled in May this year. However, after a strong protest by the Chief Minister, K. Chandrashekar Rao, the State was allowed to borrow funds from open market borrowings in June.
According to official sources, in the first quarter of this fiscal, Telangana intends to borrow ₹15,000 crore through bond sale, out of which ₹9,000 crore has already been raised in June.
The Union Finance Ministry believes that the Telangana government had secured `huge off-budget borrowings’ of nearly ₹1.5 lakh crore by giving bank guarantees to various corporations and it would be treated these off-budget borrowings as part of the state government’s overall debt under the Fiscal Responsibility and Budget Management (FRBM) limits which the State Government is opposing.
Assembly elections
Given its significant spending on the welfare schemes and state assembly elections scheduled for next, the State Government thinks that augmenting its own revenues would be vital to ensure adequate financial resources in the context of increasing political rivalry between the Bharatiya Janata Party (BJP) and the ruling Telangana Rashtra Samithi (TRS) in the State.
Liquor price hike
As a step in this direction, liquor prices increased by 20 to 25 per cent to mop up revenues. The State government’s revenue from liquor sales doubled to ₹25,585 crore in 2021-22 from ₹12,703 crore in 2015-16. The increase in prices had an immediate positive impact on the revenue, May- June sales were higher by ₹530 crore at ₹3,330 crore as against ₹2,800 crore during April-May.
Hike in registration charges
Following an increase in the market value of properties, registration charges and a buoyant real estate price, Telangana State Registration Department’s revenue increased by 135 per cent to ₹12,365 crore in 2021-22. The revenue was only ₹5,260 crore in 2020-21, mainly due to the adverse impact of the Covid-19 pandemic, as per the state government data.
Asset monetisation programme
The Government is also identifying vacant lands in the city outskirts and auctioning them as part of the asset monetisation programme. This has elicited a huge response as per square yard has gone up to about ₹65,000 in an auctioning of a layout by Hyderabad Metro Urban Development Authority (HMDA) last week.
The State is also pushing for higher acreage cultivation of oil palm, which will help generate higher revenues in the long term.
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