Telangana: Funds' usage to hit budget plan
he idea of calendar year budget was mooted by Prime Minister Narendra Modi in the recent Niti Aayog meeting.
Hyderabad: The Telangana government is in the peculiar position of having to spend its entire budget for the year by December 2017 if it decides to adopt the calendar year (January-December) as budget year from 2018.
The State Budget passed by the Legislature in March this year is applicable till March 31, 2018. But if the calendar year budget is adopted then the funds must be spent by December end — three months before completing the full year — if the new budgeting year has to start in January 2018.
Of the Rs 1.48 lakh crore Budget for 2017-18, the government has spent just Rs 10,000 crore so far. Though advancing the closure of the current budget to December would reduce revenue receipts by three months, the government will have spend the rest of expenditure earmarked till December.
Typically, the government departments postpone expenditure till the January-March quarter and rush to spend the funds between February and March.
If we average the total budgetary expenditure of the Telangana government, the government must spend Rs 11,250 crore every month.This would mean the government must spend Rs 1.03 lakh crore by December. However, the government has spend only Rs 10,000 crore, leaving Rs 93,000 crore yet to be spent. This needs to be spent in the next seven and a half months at the rate of over Rs 13,700 crore a month.
Another big question is how will government departments meet revenue collection targets set for the 2017-18 budget by December; this is necessary to enable the government to spend the budgeted amount. Finance minister Etela Rajender and secretary K Ramakrishna Rao are expected to study how that the changeover can be made.
“The idea of calendar year budget was mooted by Prime Minister Narendra Modi in the recent Niti Aayog meeting. Madhya Pradesh was the first state to respond by passing a resolution in the state cabinet recently in favour of the calendar year budget from 2018,” said an official in the finance department.
The SC/ST Special Development Fund Act, passed by the state legislature in the Budget session, is also a cause of concern for the finance department. It mandates that all departments meet fund allocations and spending targets every quarter based on the SC/ ST population, and the unspent amount has to be carried forward. Departments have to rush to make fund allocations and meet spending targets for Schedule Castes and Schedule Tribes for the remaining period.