Slowdown hits K Chandrasekhar Rao’s annual Budget

Hyderabad: Chief Minister K. Chandrasekhar Rao introduced the annual Budget for 2019-20 with an outlay of Rs 1,46,492.30 crore in the Assembly on Monday that was a whopping 19.5 per cent less than the vote-on-account he presented before the Lok Sabha polls in February. The vote-on-account was Rs 1,82,017 crore, indicating a shortfall of Rs 35,524.70 crore.

New finance minister T. Harish Rao presented the Budget in the Legislative Council.

The Chief Minister assured the House that in spite of a nation-wide economic slowdown, and its direct and indirect impact on the financial conditions of the state, the state government would continue with all welfare schemes. He said, “There will be no changes in the schemes and programmes being implemented by our government for the welfare of various sections of the people.”

Explaining the economic conditions, Mr Chand-rasekhar Rao said the fall in growth rates across sectors, marked by an overall reduction in direct and indirect revenues for the Centre, as well the state, had led to a reduction of budget estimates in the annual Budget.

He explained that of the proposed Rs 1,46,492.30-crore Budget, Rs 17,274 crore would be spent on capital expenditure and Rs 1,11,055.84 on revenue expenditure.

As per the newly proposed budgetary estimates, the fiscal deficit, which is the shortfall in the government’s income compared with its spending, was Rs 24,081.74 crore. This gap was filled by market borrowing and Central government loans. The state government ended up with a revenue surplus of Rs 2,044.08 crore, indicating that it had borrowed in excess or had not spent all the money it had borrowed. Chief Minister K. Chandrasekhar Rao described the progress achieved by TS in last five years as “nothing short of a miracle.”

“The Centre decides the broad fiscal policies of the country. The states have no option but to follow the fiscal policies of the Centre. Telangana is no exception. I regret to present a Budget for this year when both the Centre and State are going through a severe financial crisis. We have to tread carefully and cautiously during such a testing time,” he said.

He asserted, “this reflects economic realities the country is facing. We, however, hope the situation will improve.”

Mr Rao said that “there is no need for the government to hide from placing facts before the people. It is a harsh reality. Due to economic slowdown, revenues of both the Centre and state have come down. It is undeniable that economic slowdown led to some setbacks. The government has prepared financial proposals based on hard facts.”

He said, “in the first quarter of 2018-19, the country’s GDP recorded a growth of eight per cent. From then onwards, the GDP has been on the decline continually (last year second quarter seven per cent, third quarter 6.6 per cent, final quarter 5.8 per cent, and first quarter of this financial year five per cent). This clearly indicates steep decline of economic growth in India.”

Mr Rao said, “situation of several other states is worse than ours. According to Comptroller and Auditor General report, Punjab, Karnataka and Haryana have registered a minus growth rate. Compared to other states, Telangana is in a better position.”

According to CAG report, Rs 5,37,373 crore was spent by the state government towards welfare and development during past five years, out of which, the Centre’s contribution was Rs 31,802 crore. Comparing the Ayushman Bharat and Aarogyasri schemes, he said, “since Aarogyasri is far more beneficial, we have decided not to implement the Ayushman Bharat scheme.”

Maintaining that every single election promise made by the TRS would be fulfilled, he said the government has adopted a dynamic approach to budget and would continuously revise revenues estimates and review priorities, making amendments as needed to ensure none of the development goals were missed.

He described the progress achieved by Telangana in last five years as “nothing short of a miracle.”

“In first year of State formation, the State could spend just Rs 6,247 crore per month. Today, it is spending Rs 11,305 crore per month,” he added.