Telangana government eyes subsidy crisis after Center refuses open market borrowing – Reuters

Express press service

HYDERABAD: The Telangana government, which is in the throes of a major financial crisis due to the Union government’s refusal to allow open market borrowing, may face another problem in the form of “contributions in the form of subsidies”.

If the Center continues to deny permission to increase Fiscal Responsibility and Budget Management (FRBM) loans for this financial year, the revenue loss for Telangana will be Rs 53,000 crore.

The state government expected to receive Rs 41,000 Crore in Union Government Grants in 2022-23. However, in the financial year 2021-22, the Centre’s grant contributions were less than Rs 10,000 crore.

If the Centre’s non-cooperation continues, the budget shortfall due to FRBM grants and loans will be around Rs 83,000 crore. Grant contributions to Telangana from the Union Government in the first month of 2022-2023 was only Rs 189.66 crore against Rs 41,001.73 crore proposed in the state budget.

The budget size was Rs 2.56 lakh crore for 2022-23. If the state is not allowed to raise FRBM loans and the grant is limited to Rs 10,000 crore, then the size of the budget can be reduced to Rs 1.73 lakh crore.

Contributions in the form of grants received by the state in 2021-2022 were only Rs 8,619.26 crore compared to an estimated Rs 38,669.46 crore. Also in 2022-2023, the chances of the state government getting an estimated subsidy are low. This will further aggravate the financial crisis of the state government and negatively impact social welfare programs and development work.

  • Revenue Telangana stands to lose revenue of Rs 53,000 crore if the Center continues to deny permission to raise FRBM loans for this financial year

  • The size of the state budget for 2022-23 stands at Rs 2.56 lakh crore

  • The size of the budget will likely be reduced to Rs 1.73 lakh crore if the state is not allowed to raise FRBM loans and the grant is limited to Rs 10,000 crore

Comments are closed.