Telangana Finance Minister T Harish Rao on Tuesday, September 13, claimed that the Union government owes over Rs 1 lakh crore to the state in the form of pending funds, grants, and compensation. He told the Assembly that the Union government owes Telangana Rs 1,05,812 crore and if the pending funds are released, the state can clear one-third of its Rs 3.29 lakh crore debt. “If the Centre releases these funds, the state would not even be required to raise new debt,” he said in his reply to a short discussion on "Central government dual policy in implementation of FRBM (Fiscal Responsibility and Budget Management) Act - Impact on state progress."
The figure of Rs 1,05,812 crore was arrived at by including the following components.
Harish Rao alleged that the Union government’s unilateral decisions and imposition of restrictions against the state to obtain loans under Fiscal Responsibility and Budget Management (FRBM) limits were having an adverse impact on the state. He dismissed the criticism by BJP on the state's debts and claimed that, unlike the Union government which obtained loans to repay its loans, the state government spent the borrowings on capital expenditure and created assets.
He pointed out that the state took up irrigation projects like the Kaleshwaram project Mission Bhagiratha, Mission Kakatiya and other programmes which created assets for the state. He said that as per the Reserve Bank of India report, Telangana's debt rank is 23rd in the country. Harish Rao also rubbished the allegations by Union Finance Minister Nirmala Sitharaman and other BJP leaders over the per capita debt of each citizen of the state. He stated that while the Union government’s debt resulted in a per capita debt of Rs 1,25,679 for every individual, Telangana's debt amounted to Rs 94,272 per capita. During her recent visit to Telangana, Sitharaman claimed that every child born in Telangana carries a debt of Rs 1.25 lakh.
Harish Rao stated that Telangana's debt to GSDP ratio at 23.5% is much lower than the country's ratio at 55%. He claimed that in the last eight years, Telangana assumed the top position in terms of an increase in state-owned tax revenue with 11.5% growth. Odisha came second with 9.7%, followed by Haryana with 9.2% growth. Telangana's contribution to GDP also increased from 4% to 4.9% in the last eight years, despite having just 2.9% of the nation's population, he said. "Unlike the BJP government which waived off the corporate loans to benefit its friends, we distributed the state's wealth among the poor," he said.
Harish Rao reminded that the Comptroller and Auditor General (CAG) found fault with the Union government for obtaining off-budget loans which amounted to about Rs 6 lakh crore in the last five-six years. He said if the BJP MLAs and MPs from the state succeed in getting the dues from the Union government, he would felicitate them. The Finance Minister also slammed the Union government for adopting double standards in the implementation of the FRBM Act by imposing restrictions on the states, but not practising them itself.
He said the Union government took a unilateral decision to impose restrictions on the state's borrowings without constituting the committee as per the recommendation of the 15th Finance Commission. The high-powered inter-governmental committee should comprise the Union and the state governments to review the borrowings, he said. .
He claimed that though Telangana was eligible to avail loans up to 4% of its GSDP, it had let go of 0.5% of loans for the sake of farmers after the Union government insisted on fixing smart meters to agricultural pump sets. The Union government also ignored the 15th Finance Commission's recommendations to release Rs 6,268 crore to Telangana under various heads based on its performance — Rs 5,374 crore of grants recommended for 2021-26, Rs 723 crore of special grants and Rs 171 crore of grant for nutritious food recommended for 2020-21.
He said Prime Minister Narendra Modi promised to increase the tax share of states from 32% to 42% by GST implementation but by imposing more cess, the Union has reduced the tax component to the state. While the Union government was mobilising around 22.26% of its revenue through cess and surcharges, the states are losing their revenue and ending up with only 29.6% of total revenue earned by the Union government, he said, adding that Telangana has suffered a revenue loss of Rs 33,712 crore. He remarked that the state would have received more revenues if Value Added Tax (VAT) would have continued.
He alleged that the Centre has also not released Rs 1,350 crore towards the development of backward districts, and accused the BJP of destroying the federal spirit to achieve its motto of "weaker states, stronger centre". He also said that the state has lost out on Rs 15,033 crore in 2022-23 due to restrictions imposed by the Union government under the FRBM Act, finance minister Harish Rao informed the state assembly on Tuesday. He said that Telangana is eligible to obtain loans of Rs 53,970 crore in 2022-23, at 3.5% of the GSDP, but the Union Ministry of Finance recently told the state that its net borrowing ceiling has been fixed at Rs 42,428 crore. Including the restrictions on off-budget borrowings, the total loss for Telangana would be Rs 15,033 crore, he said.
Earlier on Monday, Chief Minister K Chandrasekhar Rao had claimed that Andhra Pradesh owes Telangana Rs 17,828 crore in electricity dues. Earlier in August, the Union government directed the Telangana government to pay Rs 6,756.92 crore to Andhra Pradesh for the supply of power post-bifurcation of erstwhile Andhra Pradesh. Telangana Energy Minister G Jagadish Reddy had called the order unilateral and politically motivated, and said that Telangana would take legal recourse in the matter.
With IANS inputs