 "Telangana govt presents maiden budget")
The government has made a substantial increase in allocations to roads, public health and irrigation. And, made significant provision for new social sector programmes. These include a land purchase scheme for landless families belonging to Scheduled Castes and a farm loan waiver.
Finance minister Etela Rajender presented the budget, with no new tax proposals. It showed an estimated revenue surplus of Rs 301 crore, based on the additional resource mobilisation proposed.
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“Though this budget is only for the available 10 months of the current financial year 2014-15, it has been so programmed to integrate seamlessly into the five-year perspective Plan 2014-2019,” Rajender said in the opening remarks of his 33-page speech.
A notable feature is the rise in estimated Plan outlay, at Rs 48,648 crore or 48 per cent of the total expenditure. This was was previously seen in undivided Andhra when the then Congress government sought to raise public investments, especially in irrigation, during its first tenure between 2004 and 2009.
In August, the government of Andhra Pradesh presented a budget with a total expenditure of Rs 1.11 lakh-crore, about Rs 11,000 crore higher than that of Telangana. However, AP had proposed much less in Plan spending, at Rs 26,673 crore or 23.9 per cent of the total estimated expenditure proposed for the 10-month period.
It may be recalled that in February last year, the then Kiran Kumar Reddy government of undivided AP had proposed a budget expenditure of Rs 1.83 lakh-crore for 2014-15. Now, the total of estimated expenditure of the two sibling states for the 10-month period is Rs 2.13 lakh-crore. The increase mostly comes on the back of a higher fiscal deficit and anticipated additional central grants.
The Telangana government estimates total receipts of Rs 98,099 crore. Tax income, along with the share in central taxes, accounts for Rs 45,128 crore or 46 per cent of the total receipts, continuing the trend of lower tax income in relation to total budgetary receipts. The state’s own tax receipts are estimated at Rs 35,378 crore and a non-tax revenue of Rs 13,242 crore.
For the current year, the fiscal deficit was estimated at Rs 17,398 crore or 4.79 per cent of Gross State Domestic Product (GSDP), much higher than the three per cent cap prescribed by the central law on this, the Fiscal responsibility and Budget Management Act. In August, the AP government estimated its fiscal deficit to be 7.18 per cent in the residual state, excluding the anticipated additional assistance of Rs 14,500 crore in the context of the state’s reorganisation. In the vote-on-account budget approved in March last year, the government of undivided AP estimated the fiscal deficit at 2.6 per cent of GSDP.
The Telangana government also expects more of grants from the Centre to back this ambitious budget. Central grants were Rs 21,720 crore or 27 per cent of the total estimated expenditure during the current year, according to the budget proposals.
Roads, water
The Telangana government said it would spend about Rs 10,000 crore alone on improving the road network in two years, while proposing Rs 4,000 crore in the current year. “Roads are considered a proxy for culture and prosperity. They become even more important for a state like Telangana, whose economy is service sector-oriented and has chosen manufacturing as its future,” the finance minister said.
He announced double-laning of roads connecting mandal headquarters with district headquarters. And, introduction of 1,000 new public transport buses this year.
Health
The allocation to health under the Plan was raised to Rs 2,283 crore, with substantial upgradation to state-level and district hospitals. An allocation of Rs 2,000 crore was made to revive small irrigation tanks.
The allocation to irrigation was Rs 6,500 crore. About Rs 9,500 crore went to agriculture, Rs 4,400 crore to transport and a total of Rs 23,000 crore to social service sectors — health, education, water supply, urban development and other welfare programmes, under the annual Plan. Power got Rs 1,637 crore under Plan schemes, beside Rs 3,000 crore towards power subsidy.
Land bank
The minister announced that as an important step towards assuring industry of the government’s commitment, Rs 638 crore was being proposed in the budget for clearing incentive dues to the former. “To bring momentum to industrial growth, the government is in the process of unveiling the most attractive, effective and investor-friendly industrial policy,” he said.
While stating a cell would push for faster approvals of proposals, he said a land bank with 500,000 acres, suitable for industries, was being proposed.
“For reconstructing the state, we need to reinvent and reorient Telangana...Serious and concerted action is needed to address the past neglect,” the minister said.