KCR angry over fund cuts to Telangana, fears for welfare schemes in peril

Hyderabad: Chief Minister K. Chandrashekar Rao on Saturday expressed serious concerns over the heavy cuts in Central funds in the Union Budget introduced by finance minister Nirmala Sitharaman for the financial year 2020-21.

Calling the budget proposals “highly disappointing”, Mr Rao said he was anxious of the adverse impact of the budget in the development of Telangana, which is a progressive state. He said that it was atrocious that the Centre had reduced the ratio of state’s share in central allocation of taxes revenues.

After holding a four-hour long discussion with senior officials at Pragati Bhavan here on the Union Budget proposals and their impact on the state, he said, “There is a danger of having funds scarcity for several welfare schemes in the state due to heavy cuts in central funds.” The CM said, “It is a Constitutional right of every state to have a share in Central taxes. In the 2019-20 financial year, Rs 19,718 crore was the rightful due from the Centre to Telangana. In the last Budget, the Centre announced that this amount would be paid to us but in revised estimates, it was reduced to Rs 15,987 crore.”

Mr Rao said, “With this, in the present financial year, among funds due from the Centre, there is a reduction of Rs 3,731 crore from the anticipated Rs 19,718 crore. This will lead to state’s financial planning going awry.”

KCR says Centre is incompetent
He alleged that it is a “sheer incompetence of the centre” to decrease the ratio of the state in central funds given to states.

“There is a need to collect taxes in 2019-20 and release the share of funds to states,” he said.

Reminding people that there have been occasions when there were variations of one or a half per cent even before, he said reducing funds to the tune of a whopping 18.9 per cent in 2019-20 clearly demonstrated the centre’s faulty fiscal management.

He said that with the allocations proposed in the current budget having reduced the share of funds of Telangana from 42 per cent to 41 per cent, the state would lose Rs 2,381 crore.

According to the Chief Minister’s office, the centre, which cut a whopping Rs 3,731 crore funds from its share announced in Parliament in the last financial year, was now proposing Rs 16,726 crore in the current financial year. “No one knows how much the reduction will be once the proposals are revised later,” sources in CMO said.

Lamented that the centre was “committing a great fraud and cheating on the GST front”, Mr. Rao said that the GST Act that was brought in 2017 had clearly empathised and promised that for Telangana, which registered less than 14 per cent of growth rate, deficit caused by the GST would be compensated for a period of five years. As per that promise, the centre owes the state a compensation of Rs 1,137 crore.

“The Centre has not given any clarity on these compensation funds,” he said.

Stating that there was a substantial cut in the budget in funds allocated to urban development, he said that due to this, Telangana, which was witnessing rapid urbanization, would be adversely affected. He said that for urbanization in Telangana, the last budget had allocated Rs 1,037 crore, which was now reduced by Rs 148 crore to only Rs 889 crore.

He found fault with the centre for not considering Niti Aayog has recommendation to allocate Rs 24,000 crore to Telangana for Mission Bhagiratha and Mission Kakatiya programmes, despite several requests from the state government. He criticised the Centre for not having taken any decision to put the country’s financial situation back on track.

“It is a regressive measure to cut allocations to all sectors,” Mr Rao added.