Budget changes likely; TS to divert more funds for health and police in Covid times

Substantial sums have to be kept apart for expenditure in the health sector and for subsidized distribution of food for the poor

Hyderabad: With the second wave of Covid-19 hurting government finances, the state Budget numbers are set for major revisions for the third consecutive year. Substantial sums have to be kept apart for expenditure in the health sector and for subsidized distribution of food for poor for a few more months.

The impact of the pandemic on state economy and government finances would come up for discussion at the Cabinet meeting on Tuesday. Officials said decisions on increasing budget funds for health and police departments to fight Covid19 and cutting down funds for a few other departments are likely.

The government is incurring additional expenditure on the Covid-19 front and to provide additional ration to the poor caught in the pandemic and lockdown situations besides extending financial assistance and ration to teachers and staff working in private schools. The government is also incurring huge expenditure for upgrading the facilities in hospitals for Covid treatment.

Chief Minister Chandrashekar Rao had pruned the 2019-20 Budget by 20 per cent citing the economic slowdown then and in view of the drastic cuts in Central government funds and grants. The budget size was slashed from Rs 1.82 lakh crore to Rs1.46 lakh.

In 2020-21, the year of the Coronavirus pandemic and subsequent lockdowns, the Budget was of Rs1.82 lakh crore but this was later downsized to Rs1.66 lakh crore as the state government suffered a revenue loss of Rs 50,000 crore due to the Covid-19 situation.

For the fiscal 2021-22, the state government presented an even more ambitious budget of Rs 2.30 lakh crore, hoping for revival of the economy from April. But the Covid-19 second wave since April and subsequent lockdowns dashed its hopes again.

The state government has to earn nearly Rs 20,000 crore per month to meet this target. In April, it earned Rs 9,980 crore and in May, the collections fell to Rs 5,100 crore due to the lockdown.

During a review meeting at Pragathi Bhavan on the impact of Covid-19 on state finances, the Chief Minister asked finance minister T. Harish Rao to identify the departments from where funds can be diverted to health and police departments.

The government has decided to auction government lands and plots, as also flats of the Telangana housing board to raise additional funds besides seeking Central nod for an increase in the FRBM (Fiscal Responsibility and Budget Management) limit by 3 to 5 per cent to borrow more from external sources as was done last year.

( Source : Deccan Chronicle. )
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