Hyderabad, Sept 14: Telangana Finance Minister T. Harish Rao on Tuesday 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 Centre owes it Rs 1,05,812 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 the short discussion on “Central government dual policy in the implementation of FRBM Act – Impact on state progress”
Harish Rao alleged that the Centre’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 programs 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 Central 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 percent is much lower than the country’s ratio at 55 percent. 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 percent growth. Odisha came second with 9.7 percent, followed by Haryana with 9.2 percent growth. Telangana’s contribution to GDP also increased from 4 percent to 4.9 percent in the last eight years, despite having just 2.9 percent of the nation’s population.
“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 Centre, he would felicitate them.
The Finance Minister also slammed the Centre for adopting double standards in the implementation of the FRBM Act by imposing restrictions on the states, but not practicing them itself. He said the Centre 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 Central and the State governments to review the borrowings.
He claimed that though Telangana was eligible to avail of loans up to 4 percent of its GSDP, it had let go of 0.5 percent of loans for the sake of farmers after the Centre 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. He said Prime Minister Narendra Modi promised to increase the tax share of states from 32 percent to 42 percent by GST implementation but by imposing more cess, the Centre has reduced the tax component to the state.
While the Central government was mobilizing around 22.26 percent of its revenue through cess and surcharges, the states are losing their revenue and ending up with only 29.6 percent of total revenue earned by the Centre. Telangana has suffered a revenue loss of Rs.33,712 crore, he said. 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 center”.
