Hyderabad: The Telangana Budget is set to be downsized by at least 20 per cent from the last year, as the financial condition of the state has been badly affected by the Covid-19 pandemic and the subsequent lockdown.
The government has suffered revenue losses of over Rs 50,000 crore due to the lockdown and slowing down in the economy.
Finance minister T. Harish Rao had presented the 2020-21 Budget with an outlay of Rs 1.8 lakh crore. The Budget for 2021-22 is expected be less than Rs 1.5 lakh crore.
It may be recalled that Chief Minister K. Chandrasekhar Rao had pruned Budget size by 20 per cent in 2019-20 citing the economic slowdown and drastic cuts in Central government funds and grants.
The recent Union Budget also came as a big disappointment for the TS government with cuts in Central tax devolution and imposition of agriculture cess on fuel which is estimated to result in a loss of over Rs 5,000 crore in 2021-22.
The CM has been holding meetings with finance officials at Pragathi Bhavan to finalise the new Budget for the past three days. Officials explained to the CM the need to prune the Budget size.
The 2020-21 Budget proposals were prepared estimating the state's revenue growth rate at 15 per cent. Growth fell short of target and revenues also fell. None of the budgetary targets could be met. There is little chance of making good the losses in the remaining week till the financial year ends on March 31.
The state government also paid a heavy price for stopping property registrations to facilitate the launch of the Dharani portal.
The earnings through property registrations remain the worst-affected among all sectors. The Budget had targeted earning Rs 10,000 crore through property registrations but the government collected Rs 3,189 crore, thanks to Dharani portal for which the government stopped registrations from September 7, 2020, to October 29.
On GST, the government had set an earnings target of Rs 32,671 crore but has realised only Rs 18,429 crore so far. Against the sales tax target of Rs 26,400 crore, Rs 13,954 crore could be collected.
The Budget had estimated that the state would receive Rs 10,906 crore as its share in Central taxes but the Centre has released just Rs 5,412 crore so far.
The silver lining is the Centre’s grants-in-aid to the state government surpassed the budgetary estimates, thanks to Centre releasing more grants to help states to overcome Coronavirus-induced financial crisis.
While the Budget expected Rs 10,525 crore, the Centre has released Rs 11,000 crore so far.
The non-tax revenue earnings also took a severe beating due to the pandemic. Against of the target to earn Rs 30,600 crore, only Rs 2,450 crore was realised due to the slump in registration of new vehicles, collection of transport taxes and mining cess.
The earnings through imposition of other taxes and duties also nosedived from Rs 6,041 crore expected to Rs 2,650 crore.
The excise duty collected on liquor also fell due to closure of liquor shops for nearly three months closure of bars, pubs from mid-March to September-end. The budgetary target was Rs 16,000 crore but the state has earned only Rs 8,874 crore so far.
