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Providing liberally for subsidies as well as for roads and irrigation sectors, the Telangana government on Wednesday presented the annual Budget with an estimated expenditure of Rs 115,689.19 crore for 2015-16, an increase of 15 per cent over the current year's Budget estimate of Rs 100,638 crore.
Finance minister Etala Rajender introduced the Budget in the state legislative Assembly proposing no new taxes or any increase in tax slabs even while anticipating a 41 per cent rise in state's own revenues as compared with the current year’s estimates.
The financial year is expected to end in a revenue surplus of Rs 531 crore and a fiscal deficit of Rs 16,968.75 crore (3.49 per cent of the GSDP) as against the mandatory 3 per cent level, according to the Budget estimates.
Of the total estimated expenditure, the government has earmarked Rs 63,306 crore and Rs 52,383.19 crore under the broad categories of non-Plan and Plan expenditures respectively. Most of the incremental increase of Rs 15,000 crore expenditure for the year is a result of higher spending on salaries, pensions and subsidies, officials said.
Lacks realistic base
But beyond these numbers, the Budget has remained in the realm of pure estimates as all the projections - either on the expenditure side or on the revenue side - lacked any realistic base. The government has simply copy pasted the estimates as the revised estimates for the current year while avoiding to tell how much and on what exactly it had spent during this year against the estimates.
When reporters pointed this out, the finance minister justified saying the government had full confidence in booking all the expenditure and also achieving the revenues projected for the current year.
Spending on most of the flagship programmes announced for roads, irrigation and drinking water projects has remained quite meagre when compared with large allocations, till recently, on account of resource crunch as welfare schemes like pensions and farm loan waiver limited the maneuverability of the government.
It followed the same line terming estimated revenues as real even though, for instance, a large sum of money proposed to be raised through sale of lands did not take-off at all. Going a step further, the government has proposed to raise Rs 13,500 crore through regularisation of lands and land sales in 2015-16 as compared with Rs 6,500 crore expected through land sales this year.
Earlier in his Budget speech, the minister himself admitted that lower grants, non-receipt of special assistance, CST compensation etc from the Centre had resulted in a resource shortfall of Rs 20,227 crore in the current year, putting a question mark on the government claims.
The TRS government had presented a Rs 1-lakh-crore Budget in November last year while projecting heavy grants and assistance from the Centre, which never came.
The real picture of revenues and expenditure was also not known for 2013-14, which was the last full year of the undivided Andhra Pradesh. The then government headed by N Kiran Kumar Reddy had only mentioned the Budget estimates of that year when it presented the vote-on-account for 2014-15 in February, 2014.
Responding to a question as to how the government would achieve this steep revenue growth projected in the Budget, the minster said they were expecting a surge in revenues post bifurcation and also by way of controlling tax evasion.
He said the revenue growth during the current year was on expected lines. This means the growth in revenues was expected at around 16 per cent as compared with 41 per cent in terms of state’s own revenues for 2015-16.
In the light of the 14th Finance Commission’s recommendations, the government, however, drastically cut the estimated grants-in-aid from the Centre to Rs 12,400 crore for 2015-16 as compared with Rs 21,720 crore anticipated in the current year. In tax devolution, however, only around Rs 3,000 crore rise was expected in the new fiscal. Of the total revenue receipts Rs 12,823.25 crore is estimated to come by way of share in central taxes as compared with Rs 9,74,9.36 crore in the current year.
Under Plan expenditure, it has allocated Rs 9,156.08 crore for agriculture, Rs 8,492.75 crore for irrigation, Rs 1,379.80 crore for power, Rs 24,771.21 crore for social services and Rs 5,907 crore for roads. A little over Rs 900 crore is for incentives and power subsidy to industries.
On the other hand, the salary bill is estimated to rise to Rs 20,045.23 crore in 2015-16 from Rs 16,965.33 crore in the current year, pensions bill would be up to Rs 8,235.87 crore from Rs 6,580.46 crore, power subsidy to Rs 4,257 crore (Rs 3,000 crore) and rice subsidy to Rs 2,200 crore (Rs 700 crore).
According to government estimates, the services and industry sectors are estimated to have grown at 9.7 per cent and 4.1 per cent respectively in the current year. The growth of these two sectors stood at 5.9 per cent and 0.1 per cent respectively in the previous year.
Referring to the Finance Commission’s assessment that Telangana was the only state other than Gujarat to have pre-devolution revenue account surplus state, Rajender in his Budget speech said the commission's report vindicated the historic truth of diversion of resources from Telangana in the combined state.
"Though Telangana generated 50 per cent of the total resources in the combined state, only 38 per cent of the revenues were spent on this region while looting lakhs of crores of rupees of our wealth," he said while continuing the rhetoric, which was used in the separate statehood movement several times, during his hour-long budget speech.
