Let Telangana remain a guiding light for nation

Telangana Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka, tabling ‘White Paper’ on state's finances in the Assembly on December 20, 2023, said that the economy of state was ruined by the BRS government by taking unlimited loans. He disclosed that, the debt had gone up to Rs 6,71,757 crore, and would further go up, with no tangible fiscal assets in proportion to the money spent in ten years. The ‘White Paper; is the first step to meet the fiscal challenges in a ‘Responsible, Prudent, and Transparent Manner,’ said the Deputy CM. He and Chief Minister A Revanth Reddy presented a copy of ‘White Paper’ to Prime Minister Narendra Modi, when they called on him on December 26, requesting him to come to the state’s rescue.

Both ‘White Paper’ and ‘Telangana Economy Document,’ released earlier, placed on record the ‘Exceptional Financial Growth’ during the KCR government, in terms of GSDP (Rs 13,13,391 crore) and Per Capita Income (Rs 3,12,398) growth. Despite making a remark that the ‘Quality of Telangana Budget Making Exercise’ was poor, the ‘White Paper’ observed that from 2014-15 to 2022-23, ‘Budget Estimates (from Rs 1,00,638 crore to Rs 2,56,859 crore) and Actual Expenditure Figures (from Rs 62,306 to Rs 2,04,085 crores) saw an upward trend.

The percentage share of ‘Actual Expenditure’ in the overall ‘Budget Estimates’ also went up from the lowest level of 61.9% in 2014-15 to 82.3% during 2014-23, on an average. The paper also noted that Telangana started on a firm footing on the fiscal front, registering ‘Revenue Surplus’ during the first five years adhering to the ‘Fiscal Responsibility Norms’ broadly, except during 2019-22, (obviously due to economic recession arising out of corona). In all the remaining years Revenue was in surplus!

During the lively discussion on ‘White Paper,’ AIMIM floor leader Akbaruddin Owaisi questioning its intention expressed serious concern that despite progress achieved under the BRS government, an attempt was made to send wrong message that the State is in distress. Former Finance Minister Harish Rao argued that it was not in the interests of Telangana to project it as a ‘Debt-Ridden State’ the repercussions of which would be disastrous.

I fondly reminisce the day, June 17, 2014, when (Former) Chief Minister K Chandrashekhar Rao held an informal marathon meeting for about eight hours, participated by CMO and other senior officers including from Finance. KCR put forth his ‘Broad but Crystal-Clear Vision’ of the newly formed State, frequently repeating with passion that, ‘Telangana Needs to be Reinvented and Reoriented.’ In my nine and half a years’ of working with KCR, with CMO team, and with other senior officers, who included from Finance Department, I had an opportunity to involve in the ‘Broad Contours of Budget Making.’ I never had an iota of doubt, at any point of time, that KCR was deviating from his approach to the state’s growth as envisioned.

‘White Papers’ are supposed to be ‘Authoritative Guides’ on ‘Shortcomings’ with ‘Proposed Solutions’ to tackle them. They are equally ‘Documents of Governments’ describing ‘Policy Preferences and Proposal.’ Of late, the rationale of white papers by and large, turned out to be pin-pointing the negative side of previous governments, ignoring ‘Every Good’ done. Interpretation of data and twisting facts suiting one side of argument is the strategy being followed. To what extent does the data interpretation in the ‘White Paper on State Finances’ is in consonance with the spirit of BRS Budgets, ‘debts, and growth apart,’ is arguable.

According to the ‘White Paper,’ for any government to manage the finances, ‘Budget is the Principal Tool’ and ‘Budget Data’ is standard. Preparing the Annual Budget for a State is not a ‘Trivial Matter’ but a ‘Workout Literally’ requiring knowledge, skill, right attitude, commonsense, vision, and statesmanship. As KCR said repeatedly, Budget was not a mere ‘Financial Statement of Accounts’ or repeating ‘Same Budgetary Heads with increased Percentages in Figures.’!!!

Therefore, an elaborate and scientific exercise backed by hours and days of homework, visionary, and incredible thinking process, involving ‘Highly Learned Civil Servants and Experts in Finance Matters’ as well as ‘Elected Public Servants’ preceded drafting the successive Annual Budgets of Telangana since its formation. They were not ‘Showcase Budgets.’ Strictly speaking, every BRS government Budget in itself was no less than a ‘Full-fledged White Paper,’ transparently posted in public domain the entire data of which was endorsed from time to time by Government of India bodies like CAG and NITI Aayog.

It was only after the income and expenditure under ‘Plan and Non-Plan Schemes’ from 31st March 2015 to 31st March 2016 (One Full Year) was known clearly, ‘Factual Basis for Telangana State Budget Calculation’ was arrived.

A near total understanding and deep study, department-wise, scheme-wise and priorities-wise, was done for third year Budget. The conceptual comprehensive framework was that not even a single budgeted rupee should go waste. In fact, it never happened!! The Budget of fourth year was ‘Inspirational and Message Oriented’ aimed at welfare to all sections of people. As desired by Union Government, it was broadly classified as ‘Revenue and Capital’ expenditures instead of ‘Plan and Non Plan.’

The genuine efforts of KCR attracted instant attention from fiscal experts and institutions. 14th Finance Commission Chairman Dr YV Reddy in September 2014 placed on record his deep appreciation about the competence, integrity, and commitment of CM KCR, and his team of officers from the finance department. ICRA, an independent and professional credit rating agency, awarded 'A' category status to Telangana as early as in October 2015. In November 2017, the Telangana State was ranked ‘Number One’ in the ‘India Today’s State of the State’s Rankings’ that showcased the buoyant economy of the state, based on the average annual growth of GSDP. Earlier, ASSOCHAM, an apex industry body, lauded Telangana for attracting investments with highest growth rate in a short period. These are just sample of many appreciations.

The 2018-2019 Budget chronicled financial stability and progress of state despite GST and demonetization. 2019-20 Vote-on-Account Budget was explicitly in the direction of fulfilling poll promises and full-fledged budget later, was in the context of severe economic slowdown. Following ‘Corona Pandemic Effect’ economic slowdown there was decrease in Revenue Receipts and increase in Revenue Expenditure. 2021-22 Budget was the largest one since formation of state. By the time 2022-23 and 2023-24 budgets were prepared, State’s wealth increased in a significant way due to fiscal prudence. Telangana became ‘Role Model for Entire Country,’ and followed by rest of the states. White Paper should have acknowledged these realities. White Paper’s observation that, ‘Quality of Telangana Budget Making Exercise’ was poor is incorrect.

KCR always used to say that ‘Funds Raised or Managed for Leveraging Economy’ shall not be construed as ‘Loans and Debts.’ Announcing in Assembly once that, Telangana Loans are the lowest compared to other states, KCR said that, to transform State as ‘Golden Telangana’ required loans only were taken and not beyond. KCR further said that, borrowings were within the limits of ‘Fiscal Responsibility and Budget Management (FRBM)’ and Centre’s guidelines, strictly adhering to ‘Fiscal Prudence Norm.’ BRS government, as per the data available, never defaulted on repayment to banks and financial institutions not even by a day.

Meanwhile, the ‘Sweda Patram’ (Sweat Document) released by BRS Working President, KT Rama Rao on December 24, refuting the ‘White Paper’ and attempting to set the record straight, said that FRBM debts are only Rs 3,89,673 crore, including Rs 72,658 crore old loans and, therefore, net Loans are only Rs 3,17,015 crores and not Rs 6,71,757 crore as claimed in the White Paper. KTR said that creation of ‘Assets and Wealth in Telangana’ is ten times more than the expenditure of Rs 13,72,930 crore in the last 10 years.

KTR further mentioned that the so-called debt is ‘Neither Loan nor Expenditure,’ but an ‘Investment’ resulting in the ‘Creation of Wealth’ worth Rs 50 lakh crore. Therefore, ‘Let Telangana Remain as Guiding Light for the Nation.’