Hyderabad: Thanks to demonetisation, the state’s revenues have dipped to record low. Officials say that going by current trends, it would take at least six months to put things back on track. This will impact the state’s annual budget for 2017-18.
As per the Centre’s latest instructions, all the states have to approve annual budgets a month in advance over the previous year’s to align with the Centre’s general budget which is expected to be presented in February.
With limited time available for budget preparation, the state government is proposing huge cuts in allocation of funds for students, farmers and employees to adjust the limited funds available across all schemes.
The finance department normally begins budget preparation exercise in the first week of November. The Budget is normally presented to the legislature in the first week of March and passed by the last week so that it comes into force from the new financial year on April 1.
However, the NDA government has decided to advance the budget by a month from 2017 and asked states to follow suit to ensure that required funds are in place to implement all schemes effectively from April 1.
While the state finance department has initiated the budget exercise in the first week of November, it came to a halt soon after the sudden announcement of demonetisation on November 8.
All the revenue earnings and estimates of the state government have gone haywire with business transactions coming to a halt. The government estimates that it would suffer a revenue loss of over Rs 3,250 crore this year.
According to officials in the finance department, there is no clarity over when the situation would return to normalcy. There is no idea whether the Centre would compensate states for the loss or not. In this backdrop, we have downsized average growth rates in various sectors as per current trends to prepare budget estimates for next year. A drastic cut in funds for various welfare schemes and development programmes have to be made in line with dwindling revenues, they said.
No respite even after 2 weeks of demonetisation
No respite for people in Telangana even exactly after two weeks since demonetisation was announced. Not even 15 per cent of total ATMs were calibrated to dispense new Rs 500 and Rs 2,000 notes while 95 per cent of ATMs flash ‘no cash’ or ‘out of service’ boards. RBI fails to supply adequate currency notes to the city and districts while new Rs 500 notes are yet to reach the state.
Banks not in a position to exchange even Rs 2,000 for old currency notes as RBI is not supplying even 25 per cent of the indent placed by banks. The relaxations on cash withdrawals for marriage expenses are yet to be implemented on ground. All the banks and ATMs continue to flash ‘no cash’ boards within a few hours after opening every day. There is no end to the serpentine queues before banks and ATMs and people are forced to spend hours together for transactions.
