Fund-hit Telangana reels under GST blow

Hyderabad: Shortfall in receipts to central exchequer on account of single tax regime GST (Goods and Services Tax) is having a domino effect on states and Telangana is no exception.As funds availability has become a little scarce, Telangana state might find it difficult to ground the centrally-sponsored schemes (CSS) as well as its flagship programmes like Kaleshwaram Lift Irrigation Project and Mission Bhagiratha.

Hopes have dimmed that the Centre would take a positive view of Telangana’s request for special allocations for Mission Kakatiya and Mission Bhagiratha. The situation might not change for the better until the Union government comes out of the financial straitjacket it is in now. The release of funds under the CSS to the state would also be delayed further.

Top sources said that the Union Ministry of Finance has informed the state government that it was not in a position to accept the state government’s request to allocate more funds under different schemes. The TS state has been asking Rs 19,000 crore for Mission Bhagiratha, Rs 4,000 crore for Mission Kakatiya and Rs 10,000 crore for Kaleshwaram project after declaring it as a project of national importance in the new financial year of 2018-19. 

After the introduction of the GST in July last year, revenue generation through the tax collection by the Union government has come down by 10-15 per cent of the target of Rs 95,000 crore every month. The sudden drop in the revenues forced the Centre to put on hold the requests made by the states for more funds and also delayed the release of funds for centrally-sponsored schemes.

Telangana has been asking for release of pending Rs 700 crore under employment guarantee scheme, Rs 450 under backward district development programme and money for other centrally-sponsored schemes like women welfare and child development, welfare schemes for BC, SC and ST communities and national highway development scheme.

The state deserved to avail Rs 26,000 crore under central schemes and Rs 5,000 crore under tax devolution but so far, the Centre has released only about Rs 17,000 crore. Officials said that state has got not more than 60 per cent of the total funds it is entitled from the Centre for all its programmes, including the centrally-sponsored schemes. As a result, the government will have to incur more expenditure from its exchequer for the implementation of centraly sponsored welfare schemes which is important for the TRS government since it is an election year.

In a series of meeting held with state Finance department, the Union ministry officials said that the Centre was conducting a review on revenues every month. Once it reaches targets without difficulty in tax collections, the Union government will consider the state government's requests, one state finance department official said.