The TRS government in Telangana and TDP government in Andhra Pradesh, two states carved out of a combined state two-and-a-half years ago, are in a sort of race of higher annual budgetary allocations to impress their people. But, the BJP-led NDA government at the Centre is not ready to increase its financial support to the states’ as their projections are “unrealistic”.
The Chandrababu Naidu government is set to present its third budget for 2017-18 in the Andhra Pradesh Assembly in Amaravati on 13 March, while the K. Chandrasekhar Rao (KCR) led government will be presenting its budget for the next financial year to the Telangana Assembly in Hyderabad on 16 March, amid increasing public expectations and stagnant revenues.
According to sources who spoke to The Sunday Guardian, Telangana’s budget for the coming year will be Rs 1.50 lakh crore and the Andhra Pradesh budget will be slightly higher than that, Rs 1.54 lakh crore, as both the states are locked in a game of hyped allocations for different infrastructure and social welfare sectors.
Ever since the bifurcation of the combined AP, both the governments are in a race, be it annual budgetary allocations or revenue receipts or growth projections. Both the states claim that they get more investments than the other and that their allocations to weaker sections and agriculture are higher than the other, triggering a sort of rivalry.
Actual financial health of both the states does not permit them to go for such huge budgetary allocations, but the governments have been doing this for the past few years as a populist measure, as per the analyses of the officials of the finance departments in both the states. Officials who are part of the budget preparations have no say in the process as the political leadership decides the final layouts.
The Union Ministry of Finance as well as the Niti Aayog in Delhi, who have been observing the spending patterns of the two states, are not impressed by the hyped budgetary projections and have made it clear that the Centre won’t support them beyond what was allocated and promised as per the 14th Finance Commission and the Centrally sponsored schemes outlays.
This is the reason why Union Finance Minister Arun Jaitley refused to step up allocation of funds to the Telangana government’s flagship schemes – Mission Kakatiya (restoration of minor irrigation tanks) and Mission Bhagiratha (safe drinking supply scheme to all households) – when a delegation led by state Finance Minister Etela Rajender called on him in Delhi on Thursday.
Rajender, who has almost finalised his budget that would be placed before the House next Thursday, rushed to Delhi to seek Jaitley’s help to get funds for his Rs 1.50 lakh crore projections. Telangana’s finance minister sought around Rs 15,000 crore funds from the Centre for his irrigation and other welfare schemes. However, Jaitley was noncommittal and merely promised to look into the requests.
So is the case with the TDP government in AP which, too, wants to upstage Telangana in the overall budgetary allocation, by projecting at least a few more thousands of crores of rupees, and is keen on securing more assistance from the Centre, particularly to its ambitious capital city, Amaravati. But, the Centre is learnt to have expressed its inability to provide additional funds beyond what was promised to AP.
The Union Ministry of Finance has made it clear that the Centre would not back any inflated projection of budgetary allocations, unless they were supported by realistic tax collections and revenue receipts. The Niti Aayog, too, clarified that devolution of Central funds is decided by a formula which is the same for all states.
In fact, the game of tall projection of annual budgetary allocations in AP began way back in 2004-2005 when then Congress government led by Y.S. Rajasekhara Reddy boasted of presenting a Rs 1 lakh crore budget in the Assembly. Gradually, that allocation increased over subsequent years and it has become a race for Telangana and AP governments after the bifurcation in June 2014.
The budgets of Telangana and Andhra Pradesh for the current year, 2016-17, were Rs 1.30 lakh crore and Rs 1.35 lakh crore respectively. The same in the previous year were, too, in the same order – Rs 1.20 lakh crore and Rs 1.25 lakh crore respectively. Both the governments are insistent on not lowering the size of the budget of the combined AP.