The 15th Finance Commission has expressed concern over the financial management of the Telangana government. It reminded me of the difficulties of settling old debts as well as the need to make new debts. Warned that ‘jerk’ was inevitable if not acted upon as an armory. The report, prepared by the 15th Finance Commission over the next four years, addresses a number of issues. It was suggested that it would be best to impose user charges on irrigation water and at least earn enough revenue to sustain the project maintenance.
Prime Time Zone, Telangana Bureau: The 15th Finance Commission also commented on issues previously raised by the CAG. About Rs. The CAG recalled that the Kaleswaram project, built at a cost of Rs 80,000 crore, would have to pay a huge amount of electricity bills. The 15th Finance Commission explained that some of the self-financing resources coming to the state are being under-collected. Maharashtra accounts for about 15% of registrations-stamp duty, while Telangana accounts for only half of that. Indicated that there was a need to focus on this. He stressed that the government should take into account not only the loans taken under the FRBM but also the loans taken in the name of various corporations irrespective of the budget. It is clear that this is the way to go in the future.
Etata Rising Welfare Costs The financial burden on the state government has increased significantly with the newly introduced welfare schemes after the formation of Telangana state, with an average of Rs. 20,438 crore by 2018-19. Recalled that it had increased to 25,375. In the 2017-18 financial year, revenue expenditure was only 11.3% of the state’s GDP, but by 2020-21 it will reach 12.5%. At the same time, the capital expenditure that contributes to the wealth of the state has declined from 5.6% in 2015-16 (in the state’s GDP) to 3.4% by 2020-21. After the Assembly elections in December 2018, revenue expenditure increased further by doubling the financial assistance to schemes like ‘Asara’ and ‘Kalyana Lakshmi’, increasing the cost of schemes like ‘Raitubandhu’ to Rs 1,000 per acre per season and also doubling the cost of ‘Raitu Bima’. Although the financial community did not address these issues, it did emphasize that financial management should be more robust.
Debts are only half the interest
The latest report by the Finance Commission emphasizes that despite the debt incurred by the state of Telangana being subject to FRBM, it continues to be a surplus budget state and despite earning a place in the list of developing states, it has to pay only 1.3% of the state’s GDP in the form of interest on loans taken in the past, irrespective of the budget, for various project needs. It stressed that even though the total debt was three per cent, the old debts were still at a level where they had to pay only half of the total debt for interest on the debts. The CAG estimates that the capital expenditure on various projects, infrastructure, etc. is almost entirely in debt, according to the 15th Finance Commission report. Debt through FRBM accounts for three per cent of GSDP, while expenditure on capital expenditure each year is 3.4 per cent. Doubts have been expressed as to whether capital expenditures would be possible if these debts were not made. Compared to the two, it is clear that they are almost completely equal and meet each other’s needs.
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