Ahead of the Congress’ maiden budget session in the Telangana assembly scheduled for Thursday, February 8, Chief Minister Revanth Reddy on Saturday, February 3 met with formeAdanr Vice-Chairman of the Planning Commission Montek Singh Ahluwalia, former CBDT member Arbind Modi and economist Praveen Chakravarthy.
Speaking to TNM, Praveen Chakravarthy spoke about how a major focus of the Telangana government is on promoting HiTech manufacturing with a focus on defense and electronics. “Considering Hyderabad’s investment value, CM Revanth and Deputy Chief Minister Bhatti Vikramarka were looking at defense equipment and high precision electronics to boost the state’s economy,” he said.
It is worth noting that the Telangana government on January 17 signed four Memorandums of Understanding (MoU) with the Adani group. Gautam Adani told CM Revanth that investments worth Rs 12,400 crores would be invested in Telangana in the coming few years. Of the four MoUs, the Adani Aerospace and Defence will alone invest Rs 1,000 crores in Counter Drone Systems and Missile Development and Manufacturing Centres at the Adani Aerospace and Defence Park.
Praveen Chakrabarthy also added that under the Bharat Rashtra Samithi (BRS) led state government, the state incurred very high, off-balance sheet debt. “Further, the tax revenues when contrasted with economic activity were significantly lower.”
The most recently available report on Telangana finances published by the Comptroller and Auditor General of India (CAG) in March 2021 noted that under the BRS government, the state could not achieve any of the three fiscal targets and had instead registered a massive revenue deficit.
“The BRS government failed to disclose sources, purpose and extent of their borrowings appropriately as part of its budget documents. By not doing so, the government’s ‘crucial socio-economic schemes/projects’ went beyond the oversight and control of the legislature,” the report noted.
The Telangana Congress soon after coming to power, noted in December 2023 that the debt-to-GSDP ratio is extremely high. “If Government Guaranteed loans raised by SPVs but serviced by the Government are added, the debt-to-GSDP ratio would increase to 36.9%,” a white paper released by the state government’s had noted.
The CM and Deputy CM’s discussion with the economists hint at the Telangana government’s decision to ensure better efficiency in their collection of taxes as well as punching up on revenue investments.
Chakravarthy also noted that considering the outstanding dues owed to states by power distribution companies, it was necessary for state governments to consider alternative sources of development. “The Chief Minister is clear about wanting to ensure that Telangana is at the forefront of alternative power, which would boost the net zero commitment for the state.”