Telangana Budget: A difficult task striking a balance between a feeble flow of funds, election-year sops

Telangana Budget: A difficult task striking a balance between a feeble flow of funds, election-year sops

As he presents the Budget for 2023–24, it is going to be a tough task for Telangana Finance Minister T Harish Rao to balance the exigencies of an election-year Budget with the shortfall in receipts to fund the welfare and development schemes.

The size of the Budget for 2023–24 is likely to be in the range of ₹2.75-3.00 lakh crore as against ₹2.56 lakh crore in 2022–23. But what worries the K Chandrashekar Rao government is the poor flow of receipts from the Central pool, which might force it to look at other sources to fund its flagship welfare schemes like Dalit Bandhu (financial assistance to Dalit families at ₹10 lakh each), Rythu Bandhu, and Asara pension schemes. 

Source: Telangana Finance Dept.

Source: Telangana Finance Dept.

But its ability to raise funds is restricted as the Centre is not allowing the States to cross the FRBM limits in its bid to 

In the election year, the TRS government is likely to introduce populist schemes, including a financial allowance scheme for the unemployed youth. In keeping with a promise made by the Chief Minister during the run-up to the 2018 elections, the government is expected to make an announcement regarding the scheme.

However, the government seems to be in a dilemma. It is weighing options—whether to roll this in phases or wait one more year. Keeping in mind huge aspirations and a very high number of eligible graduates, it is in two minds whether to go ahead or ignore it for this time. It is also worried about the likely difficulties in implementing the scheme.

Revenue receipts

As of December 31, 2022, the State reported total revenue receipts of ₹1.39 lakh crore, which is 57 per cent of the Budget Estimates of ₹2.45 lakh crore, leaving a yawning gap between the estimates and the actual receipts.

However, it reported a higher realisation in GST shares this year. The receipts from the GST share stood at ₹31,000 crore as of December 31, 2023, which is 73% of the Budget Estimates (of ₹42,189 crore) as against 66 per cent of the estimates in the same period of the previous financial year.

Vote-on-account or regular budget?

Election to the State Assembly is due in 10 months as the term of the present House ends in December 2023. A source in the government said that it is going to be a full-fledged Budget as the lag is good enough for it to go for a regular budget.

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