Despite growing debt, the government is on a binge-spending spree ahead of the Assembly elections later this year.
Published Aug 17, 2023 | 1:00 PM ⚊ Updated Aug 17, 2023 | 7:49 PM
Former Telangana Chief Minister and BRS chief K Chandrashekar Rao. (File photo/Supplied)
With the Telangana Assembly elections within touching distance, the binge spending by Telangana Chief Minister K Chandrashekar Rao on welfare schemes continues unabated, pushing the state’s overall debt to well over ₹4 lakh crore.
In the latest instance, the state government on Monday, 14 August, transferred ₹5,809 crore to nine lakh farmers, on KCR’s instructions and at one go, towards the waiver of farm loans of up to ₹99,999.
Telangana’s debt is on the rise.
Of all the welfare schemes that KCR has announced so far, the farm loan waiver takes the cake.
The officials estimated that the state would require ₹19,000 crore by mid-September if it has to clear loans up to ₹1 lakh of about 29.61 lakh farmers.
KCR might need to perform a miracle to come up with the staggering amount to waive the farm loans by mid-September, a deadline he imposed on himself.
The state government has already cleared loans up to ₹50,000 of 7.19 lakh farmers by shelling out ₹1,943.6 crore. In other words, the state government has cleared loans of up to ₹1 lakh of 16.66 lakh farmers.
The icing on the cake, if you want to call it that, is that the government is also expected to pay the accumulated interest on these farm loans.
But farm loan waiver is only one of several welfare schemes that appear to be becoming a millstone around the Telangana government’s neck.
Though it is becoming heavier with each passing day, no one in the government says that the burden is pinching it, as they have to put up a show that the regime is people-friendly, particularly when elections are around the corner.
There are several other fund-guzzlers under implementation in Telangana, with more in the pipeline. For instance, 43,000 TSRTC employees were recently included in the state government rolls.
According to official sources, the burden on the state government for this step would be about ₹3,000 crore, as the RTC employees have to be treated on a par with the government employees, which means their pay has to be raised.
This apart, KCR has reiterated his intention to constitute a pay revision commission (PRC) and told the state government employees beforehand that he would raise their salaries to a level that would make the entire country gape at them in surprise.
He also made it a point that he would ensure that the RTC employees who came on the rolls of the state government would get the PRC benefit, which only meant more of a financial burden.
Meanwhile, the Comptroller and Auditor General (CAG) report on the Telangana government’s finances during 2021-22 has come across as a shocker.
In its report, tabled in the Assembly on 6 August, the CAG said that the government incurred a net excess expenditure of ₹75,053 crore, which was 29 percent more than the estimates, in 11 grants or appropriations, against the approved budget of ₹2,55,017 crore.
The CAG also pointed out that capital expenditure did not increase commensurate with the growth of the GSDP in the state.
Over the last month, KCR announced several new schemes, extended the benefit of schemes to more beneficiaries, or even increased the quantum of the benefits.
Gruha Lakshmi: 4 lakh beneficiaries with an estimated cost of ₹12,000 crore
Enhancement of ration shop dealers’ commission means 17,227 beneficiaries and estimated cost of ₹139 crore
Enhancement of pension to the physically challenged means 5.11 lakh beneficiaries and expenditure of ₹600 crore
Diet charges in Gurukul schools with 7.5 lakh beneficiaries at a cost of ₹2,847 crore
BC Bandhu: ₹1 lakh assistance to people from Backward Classes, with a fund allocation of ₹500 crore
Absorption of RTC staff into the government service at estimated cost of ₹3,000 crore.
Several other large allocations have been made in the state budget 2023-24 for various sectors, and they are essentially welfarist in nature.
₹17,700 crore for the Dalit Bandhu Scheme
₹11,704 crore for an Investment Support Scheme for farmers (Rythu Bandhu)
₹2,740 crore for Aasara pensions
₹11,009 crore assistance to local bodies, including for school education
₹8,260 crore assistance to Transmission Corporation of Telangana Limited
₹500 crore to pull out discoms from losses under the UDAY scheme
₹11,000 crore for the construction of two-bedroom houses for the rural and urban poor
₹8,493 crore capital outlay for major irrigation projects.
But the implementation of the schemes may not be as easy as announcing them, since the state’s financial position is not very comfortable.
Telangana has been going in for the sale of prime land to mobilise funds for the state’s exchequer. It recently sold lands in Kokapet and Budvel and announced the auctioning of land in Mokila near the financial district in the state capital.
Fortunately for the chief minister, the lands are raking in mega bucks for the state government, which might help him to tide over the financial requirement to keep the welfare schemes going.
In the current financial year (2023-24), the state government has already borrowed ₹21,000 crore — including ₹2,000 crore raised from auctioning bonds through the RBI. This will add to the public debt, which has been steadily going up.
In 2014, when the state was formed, the outstanding debt was ₹75,577 crore.
It reached ₹3.22 lakh crore — at the end of 2022-23. It is expected to touch ₹3.57 lakh crore in 2023-24, a jump of nearly 11 percent over the previous year, while the overall debt burden — including loans taken by the state’s public-sector enterprises — has reached ₹4.33 lakh crore.
Finance Minister T Harish Rao reiterates that one of the main contributors to the state exchequer was the Commercial Taxes Department, which has a target of collecting ₹85,413 crore in 2023-24.
The department ended up with ₹72,564 crore in 2022-23, which was a record of sorts.
At a recent official review, Harish Rao said: “How well we implement the welfare schemes depends on the performance of the Commercial Taxes Department.”
But, with the number of welfare schemes increasing by the day, it remains to be seen how Harish Rao mobilises resources for their implementation.
