Nation Politics 20 Oct 2018 Sops send state babu ...

Sops send state babus into a tizzy

Published Oct 20, 2018, 2:05 am IST
Updated Oct 20, 2018, 2:05 am IST
Sops in manifestoes will double load on state exchequer.
Telangana state government
 Telangana state government

Hyderabad: With political parties promising all sorts of welfare schemes and sops in their election manifestos to attract voters, the finance department is seriously worried about where the money to finance these schemes is to come from at a time when the Telangana state government is already in debt.  

In the 2014 Assembly elections, the Telangana Rashtra Samiti had announced a waiver of Rs 1 lakh on loans taken by each farmer. The state exchequer shelled out Rs 17,000 crore for this. The TRS has announced it will continue the scheme if it returns to power, which means another Rs 17,000 crore are needed.  


The Congress has announced it will waive off Rs 2 lakh in farm loans, which will cost the state exchequer around Rs 35,000 crore. The Congress has also promised that it will double the current old age pension amount. At present the state government is spending around Rs 500 crore per month on pensions, which will double to Rs 1,000 crore per month if the Congress comes to power. 

Old age pensions cost the exchequer Rs 134 crore per month now and will go up to Rs 268 crore per month under a Congress government and Rs 400 crore a month under a TRS government since TRS has promised to increase the amount from Rs 1000 a month Rs 3,016 a month. 


It has also promised to lower the age limit for pensioners to 57 years, increasing the number of pensioners by eight lakh, and burdening the exchequer by another `240 crore, bringing the total spending on old age pensions to Rs 650 crore per month.  

A physically challenged person currently gets Rs 1,500 per month from the government, resulting in a total expenditure of Rs 893 crore per year. Both the Congress and the TRS have promised to double the amount, pushing the bill up to Rs 1,800 crore per year.

The Rythu Bandhu scheme costs the state Rs 8,000 crore per year. In the current financial year, the state government has spent more than Rs 10,000 crore. The TRS has announced it would increase the amount from Rs 8,000 per acre per year to Rs 10,000 per acre per year. To fulfil this promise the state government has to spend Rs 1,000 crore more per year.  


To implement the farm loan waiver, old age pensions, aid for physically challenged persons and Rythu Bandhu scheme, the TRS if it retains power will have to shell out Rs 28,025 crore and if a Congress government comes to power it will have to spend Rs 45,127 crore in the first financial year. 

Officials in the Finance department say that the state government’s revenue is increasing very little whereas the expenditure is increasing significantly.  According to the finance department the average increase in revenue is at the rate of Rs 2,000 crore per year. The state government revenue, including grants and other monies sanctioned by the central government, goes towards salaries for government employees and pensions for retired government employees, and several welfare activities like Asara pensions and others. For capital expenditure, fewer funds are available.


In the 2018-18 state government annual budget, the total debt of Telangana State stands at Rs 1.80 lakh crore. Every year the state government is paying Rs 11,000 crore on the interest on the debt. In addition to this, the state government has made off-budget borrowings for the Kaleswaram, Mission Bhagiradha and double bedroom housing schemes. Servicing the debt is a major burden for the state government. A senior IAS officer has commented that in future IAS officers will be scared to work in the finance department.

Location: India, Telangana, Hyderabad