At his first review meeting with Finance Department officials, the Deputy Chief Minister said the state was sitting on a ₹5 lakh crore debt.
Telangana Chief Minister Revanth Reddy. (X)
As the initial euphoria of winning the Assembly elections begins to cool off, the Revanth Reddy-led government will be saddled with the most unenviable task of augmenting revenues for the implementation of the six guarantees that the Congress had promised to the people.
A modest ballpark figure suggests that the cost of the promises will be somewhere between ₹60,000 crore and ₹70,000 crore. However, some estimates put it as high as ₹1.5 lakh crore.
It could be more or less — depending on the eligibility criteria that the government fixes for one to claim the freebies. The costs may be manageable if the Congress government applies numerous conditions for eligibility, bringing down the number of beneficiaries.
Either way, the state would have to save every nickel.
Though the task ahead is daunting, the government is putting up a brave front. Chief Minister Revanth Reddy, in fact, appears to be a man in a tearing hurry to implement all six guarantees one after the other within the next 100 days.
He said recently: “There is a 15 percent growth in Telangana’s economy. It will take care of the additional financial burden the six guarantees will impose on the state. If it does not suffice, we will auction the 10,000 acres of land which KCR had encroached on and will use the proceeds to fund the guarantees.”
Revanth’s Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka, on the other hand, seems to have a premonition of danger.
At his first review meeting with the Finance Department officials, he said that Telangana was sitting on a debt pile of over ₹5 lakh crore, and now that the state has many more commitments, the officials have to find ways to mobilise additional revenues.
He asked them to wear their thinking caps and come up with ideas to augment revenues. He wanted them to act as though they were the stakeholders in the entire exercise, and not act as mere employees.
Interestingly, even the BRS thinks these guarantees cannot be implemented.
Legislative Council Chairman Gutta Sukender Reddy said in a statement: “The new government should do an honest soul-searching exercise to know which of the guarantees it can implement and which it cannot, and come out and explain to the people. If you tell the truth, the people will understand.”
This is the scheme that will be the biggest drain on the state’s finances.
The Mahalakshmi scheme has three components: Free rides for women on non-luxury Telangana State Road Transport Corporation (TSRTC) buses within the state; paying ₹2,500 per month to each woman head of a family in the state; and the supply of LPG cylinders at ₹500 each.
Revanth Reddy has already kicked off the free bus rides for women component. The other two components are yet to be launched.
Similar to the Shakti scheme in neighbouring Karnataka, the cost of the free bus rides is easy to estimate. The TSRTC has some 10,500 buses in operation, covering 38 lakh kms a day, carrying as estimated 95 lakh passengers daily.
Going by the actual costs being incurred in Karnataka, it is estimated that the scheme will cost the Telangana exchequer about ₹3,000 crore annually.
No official estimate has been made of the cost for providing LPG cylinders at ₹500.
Even if the scheme is restricted to BPL families, there are some 93 lakh such families in Telangana, as per the KCR Bima scheme. Each family presumably consumes 12 cylinders per year, the average annual consumption in India.
The total number of cylinders consumed by BPL families would thus be 11.16 crore. At current rates, the subsidy would be about ₹520 per cylinder. That would imply an outgo under this head of about ₹5,800 crore per year.
Of course, not all BPL families may use cylinders, and many may not use 12 in a year.
As the eligibility criteria have not yet been finalised for the scheme to give ₹2,500 to each women head of family, it is not easy to make an assessment of the outgo under this head.
In Karnataka, a similar scheme is in implementation where the cash benefit could be availed by the woman heads of a families. But several conditions have been brought in. For instance, women whose husbands pay income tax will be excluded.
Under the Cheyutha scheme, the Arogya Shree insurance ceiling has already been hiked from ₹5 lakh to ₹10 lakh. The government is yet to hike pension to ₹4,000 per month.
The beneficiaries are senior citizens, widows, single women, toddy tappers, handloom weavers, filariasis and dialysis patients. The previous BRS government paid Rs 2016 per month as welfare pensions to various groups of beneficiaries. This cost the government about Rs 12,000 crores annually. Hiking pensions to Rs 4000, in effect almost doubling it, would mean an additional Rs 12,000 crore per annual as outgo.
It seeks to provide 200 units of power free to all households. This is the one scheme where there is a proper estimate of the cost — ₹4,000 crore per annum.
On Monday, 11 December, Revanth Reddy ordered the release of the Rythu Bandhu money to farmers as he gave a commitment that he would do it within 10 days of coming to power. As it is the Rythu Bandhu money — and not the Rythu Bharosa, which the Congress version of the scheme — the farmers would be getting only ₹5,000 per acre for the rabi season.
The reason given for following the Rythu Bandhu guidelines is that the Rythu Bharosa scheme details have not yet been worked out. Revanth asked the officials to drain out the treasury to make payments.
The chief minister did not talk about farm labourers to whom he had promised ₹12,000 per year.
Under the Rythu Bandhu for the rabi season alone, the outgo would be about ₹7,000 crore for 70 lakh farmers. The total amount will be ₹21,000 crore, including farm labourers and the ₹500 bonus on paddy at the time of procurement.
House sites and ₹5 lakh for construction of the houses for Telangana protagonists. No estimates have been made yet.
This scheme involves Vidya Bharosa cards worth ₹5 lakh and an international school in each mandal, For this, no estimates have been made yet.
According to the Telangana Fee Reimbursement Scholarship Guidelines 2023, reimbursement of the full fee is admissible for all the students who secure ranks below 10,000 in common entrance tests (CETs), like TS EAMCET, ICET, and those who take admissions in the Convenor quota in the counselling conducted by the government.
The annual income for Scheduled Caste and Scheduled Tribe (SC/ST) students should not exceed ₹2 lakh and for Backward Classes (BCs), it should not exceed ₹1 lakh. Only local students of Telangana are eligible for this scheme.
The total amount paid by the government will vary depending on the course and college fee structure of the students. If a student gets a higher rank than 10,000 in TS EAMCET 2023, the government pays only ₹35,000. About 10 to 14 lakh students are benefiting from this scheme in Telangana.
Another challenging promise that the Congress had made is waiving crop loans up to ₹2 lakh. On 11 December, Revanth Reddy asked the officials to come out with an action plan to mobilise to make payment for waiving the loans.
According to sources, the outgo would be about ₹30,000 crore and Revanth will have to raise loans from banks. The repayment would be on a monthly basis for five years. This would work out to be ₹600 crore per month.
In 2014, the number of Aasara pension beneficiaries was 28,47,855. By 2023, the number has gone up to 43,81,338.
In 2014, the outgo of funds was ₹67.47 crore per month. By 2023, it has increased to ₹976.42 crore per month.
Additionally, the physically challenged persons’ pension has been increased to ₹4,016, benefiting 5,11,656 individuals.
Initially, the Telangana government provided pension support to the elderly, differently-abled, HIV-AIDS victims, handloom workers, and stone masons. It was later extended to beedi workers in March 2015, single women in April 2017, filaria-affected persons in April 2018, and dialysis victims in August 2022.
Since 2020-21, the government has been paying ₹2,016 as Aasara pension to senior citizens, widows, beedi workers, filaria victims, single women, handloom weavers, toddy tappers, and AIDS victims, and ₹4,016 for disabled pensions.
With no Aladdin’s lamp in his hand, Revanth Reddy would have to cut corners to ensure uninterrupted flow of the freebies to the beneficiaries, while at the same time not letting them know how hard he is biting the bullet.
The government will have to forget the obvious choice of taxing the people. If it does, the BRS, a wounded tiger, is waiting exactly for this opportunity to leap at the Congress government.
Revanth Reddy’s skills in the management of resources will be put to a litmus test. The proof of the pudding, as they say, is in the eating.
May 09, 2024
May 09, 2024
May 09, 2024
May 09, 2024
May 09, 2024
May 09, 2024
