Telangana FM T Harish Rao slams Central government policy on state loans

T Harish Rao also claimed that the Central government was crippling the states financially by delaying GST compensation.

ByRaj Rayasam

Published Sep 14, 2022 | 3:18 PMUpdatedSep 14, 2022 | 3:18 PM

T Harish Rao

Telangana Finance Minister T Harish Rao on Tuesday, 13 September, took the Central government to task for creating obstacles for states in raising loans by imposing a limit under the Fiscal Responsibility and Budget Management (FRBM) Act.

Replying to a debate on restrictions on borrowings under FRBM in the state Assembly, he said that as if this was not enough, the Centre was crippling the states financially by delaying GST compensation.

He said that at a time when the GST compensation was something that the states should get back by way of right, the Centre was behaving as though it was doing a favour.

Finally, what it had done was that it had allowed the states to raise loans to the extent of the GST compensation due to them, and now the Centre was behaving as if it had been magnanimous, he said.

The finance minister also said that states used to be better off when the VAT regime was in force.

Now, the states are looking to the Centre for financial help, which is not forthcoming, said Rao.

He did not understand how the Centre could impose cuts on borrowing without consulting them, he added.

Rao said that another objectionable trend was that the Centre was linking the enhancement of the FRBM limit to the implementation of reforms in the power sector.

According to him, the Central government said states that enacted such reforms could go in for 0.5 percent more than the permissible FRBM limit, which translates to ₹6,000 crore per year.

Though it is a huge amount, Telangana let go of it because it did not want farmers to suffer, as the power sector reforms meant fixing meters to agriculture pumps.

He said though the 15th Finance Commission asked the Centre to sanction ₹6,268 crore, it had not been acted upon.

The Central government also did not release any money despite the Niti Aayog asking it to reimburse the expenditure incurred by Telangana on Mission Bhagiratha and Mission Kakatiya, he said.

Though the Central government was patting its back saying that it had increased its devolutions to Telangana to 42 percent, in actual terms what the Centre was taking from the state was more than what came back, said Rao.

On top of this, the Centre, in the name of cess, was collecting huge amounts from the states, he claimed. As they are not classified as taxes, not even a rupee is coming back to the states, said the minister.

Rao also said that the Centre owed the state ₹1,350 crore for the development of backward districts.

As the Centre had starved the state, it was left with no alternative but to look for alternative measures to shore up finances without imposing any taxes on the people.

VRAs’ strike continues

Meanwhile, Municipal Administration Minister KT Rama Rao promised Village Revenue Assistants (VRAs) who have been on strike for quite some time now that the government would look into all their demands.

He told them on the Assembly premises that the chief secretary would meet them on 20 September as everyone was now busy with the Telangana National Integration Diamond Jubilee celebrations, which begin on 16 September.

After the state government had disbanded the Village Revenue Officers’ setup, VRAs had no work. They have been apparently doing menial work at offices.

On Monday, Chief Minister K Chandrasekhar Rao said in the Assembly that they would soon be accommodated in the Irrigation Department.

At least two VRAs have already died by suicide since they were rendered jobless, leading to outrage in several sections of society.

KCR to be chancellor of Forest University

Meanwhile, the Assembly also passed the University of Forestry Telangana Bill of 2022, facilitating the setting up of the university, for which the chief minister will be the chancellor.

The chief minister will in turn appoint the vice-chancellor who will be a full-time officer.

Usually, the chancellor of a university is the governor of the state.

The bill was moved by Minister for Forests A Indrakaran Reddy.

The university, the first of its kind, is expected to help in the development of forest sciences in the state.