Covid squeezes Telangana State coffers

Hyderabad: The Telangana State Government has trimmed the 2020-2021 Budget outlay by about 20 per cent in view of the prevailing financial crisis. According to top sources, the state suffered a loss of Rs 52,750 crore revenue due to the corona pandemic in the first two quarters of the current financial year and hence the budget estimations had to be reduced to around Rs1.4-lakh crore from the projected Rs 1.83-lakh crore outlay. The Finance department has finalised the revised budget estimations and it is likely to be submitted to Chief Minister K Chandrashekar Rao for his final nod before the completion of the third quarter by December end.

Sources said that allocations to Irrigation, Roads and Buildings, Panchayat Raj and Rural Development, Municipal Administration and Urban Development will be cut drastically. There would be a moderate cut in the funds earmarked to the Medical and Health and Education department while the allocations to BCs, SCs, STs and minorities welfare and other welfare schemes would remain unchanged.

"The government received Rs 39,608 crore from April to October in the last fiscal through taxes and other resources. In the current fiscal, it had received only Rs 33,704 crore during the same period. In the 2020-21 budget proposals, it was estimated that there would be 15 per cent growth in the state's revenue, but the pandemic had adversely impacted the projections," said the source.

Officials said that to tide over the gap between revenue generation and expenditure, the Government decided to change its priorities. As per the new financial management plan it decided to cut the capital expenditure by 70 per cent. The funds to the state under various centrally-sponsored schemes are likely to be reduced.

The Union government has projected Rs 9,725 crore in the 2020-21 under several centrally-sponsored and assisted schemes to Telangana, but actual receipts so far were not more than Rs 6,000 crore. The state government is yet to receive official communication on the release of pending funds even after the end of the third quarter, a senior official averred.

Officials said that it will be the second consecutive time the government has decided to slash the budget outlay. In the 2019-20 financial year, the government reduced the total outlay by Rs 42,000 crore. In the last financial year, Chief Minister K Chandrashekar Rao presented vote on account in February 2019 on account of General Elections with a total outlay of Rs 1.82-lakh crore and it was downsized to Rs 1.46 lakh in the general budget presented in September in the same year.

During the presentation of the budget proposals, the CM maintained that the budgetary estimates were revised due to economic slowdown in the country and a shortfall in the state revenues. In the current financial year also, the financial condition of the state was grim.