Telangana’s Fiscal Stress Due to KCR Govt, Debt Rose 10 Times, Alleges Congress; BRS Calls It ‘White Lies’
Telangana’s Fiscal Stress Due to KCR Govt, Debt Rose 10 Times, Alleges Congress; BRS Calls It ‘White Lies’
In a white paper released by the Telangana Deputy CM, Congress said there is a huge gap between the budgeted and actual money spent on the welfare schemes by the previous BRS government. BRS, however, countered the Congress, and presented a fact sheet and a list of assets created

The Telangana Legislative Assembly witnessed fireworks over a white paper on state finances released by deputy chief minister Mallu Bhatti Vikramarka on Wednesday. While the Congress government maintained that the paper was meant to educate people about the way the previous K Chandrashekar Rao’s government destroyed the state financially, the Opposition, Bharat Rashtra Samithi (BRS), said the paper was full of “white lies” and has maligned the image of a developed state.

What Does the White Paper Say?

There is a gap of almost 20% between the budgeted and the actual money spent on welfare scheme such as Dalit Bandhu and others by the BRS government, the paper pointed out. This figure is not only high when compared to other states, but also in comparison to the expenditure achieved in the united Andhra Pradesh.

After the formation of the state, the total debt of the state and the Special Purpose Vehicles (SPVs) has gone up to Rs 6,71,757 crore from Rs 72,658 crore in 2014-15. The gigantic increase in the debt (almost 10 times) has created an enormous fiscal stress. No tangible fiscal assets in proportion to the money spent were created in the past 10 years.

The debt servicing burden of monies, which are borrowed on the budget and off budget, has increased enormously and is consuming 34% of the state’s revenue receipts.

Due to the increased fiscal stress, the state has to depend on the Reserve Bank of India (RBI) on a daily basis. The state has not been able to spend enough money on critical sectors such as education and health where the budgeted amount as the proportion of the total expenditure is amongst the lowest in the country.

BRS’ Counter

In response to the white paper, the BRS released a fact sheet and a list of assets created, and enumerated several reasons for the increase in the state debt.

• The previous government took over Discom debts of Rs 8,923 crore in 2016 under the Ujwal Discom Assurance Yojana

• The Centre allowed additional borrowings of Rs 1,435 crore in 2019 on account of lower tax devolution

• Additional borrowings of Rs 2459 crore was allowed as per recommendations of the 15th Finance Commission

• Due to the Covid-19 pandemic, Telangana was allowed additional borrowing to the extent of 2% of Gross State Domestic Product (GSDP)

• In 2021, the Centre allowed additional borrowing of 1% of GSDP

In addition to this, former minister Harish Rao said debt to GSDP ratio is taken into consideration but instead “the Congress government mentioned debt to revenue receipt”. He further said the paper was prepared to manipulate facts and attack rivals.

However, chief minister A Revanth Reddy maintained that the BRS has ruined the state with its financial mismanagement and corruption. He further said the facts were put before the public to make them aware but this would not affect the implementation of six guarantees by the Congress.

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