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Centre owes Rs 1.05 lakh crores to TS; federal spirit under attack: Harish Rao

Hyderabad: The union government owes Telangana Rs 1,05,812 crore in delayed payments, grants, and compensation, Telangana finance minister T Harish Rao said on Tuesday.

“The state government can clear one-third of its Rs 3.29 lakh crore of state obligations if payments are made by standards and guidelines,” he added.

When explaining the negative effects of the Centre’s unilateral decisions and imposing restrictions on the state to obtain loans under Fiscal Responsibility and Budget Management (FRBM) limits, Finance Minister T Harish Rao said, “Let alone clearing debts, we would not even be required to obtain loans, if the Centre released these funds until today.”

Harish Rao took part in a brief discussion in the Assembly on “Central government dual strategy in execution of FRBM Act – Impact on state progress. “If the BJP MLAs and MPs are successful in collecting their dues from the Centre, I pledge to congratulate them on behalf of the state administration,” he remarked.

The Finance Minister stated that by placing limits on the states but not applying them to themselves, the central government was indulging in ‘double standards’ in the implementation of the FRBM Act.

“The union government unilaterally decided to impose restrictions on the states’ borrowings without creating the committee, despite the 15th Finance Commission’s recommendation for the formation of a powerful intergovernmental committee made up of the Central and state governments to review the borrowings. Furthermore, these limitations are being implemented retrospectively,” he said.

Even though Telangana was qualified for loans up to 4% of its GSDP, Harish Rao stated that after the Centre insisted on installing smart metres at agricultural pump sets, due to which the state government decided to forgo 0.5% of loans out of consideration for the farmers. “The 15th Finance Commission recommended that Telangana receive Rs 6,268 crore under various headings based on its performance, but the union government disregarded this suggestion as well,” he said.

Harish Rao further said that the states are losing money due to the centre’s decision to introduce GST which led to a decrease in the states’ tax component.

“Prime Minister Narendra Modi vowed to raise the tax contribution of the States from 32% to 42% with the introduction of the GST. However, it has decreased the tax component to the State by imposing a greater cess, according to the finance minister. The states lose money and end up with only 29.6% of the total revenue collected by the Center, whereas the central government was collecting roughly 22.26 per cent of its revenue through cess and surcharges,” he stated.

Harish Rao remarked the state government used its borrowings to fund capital expenditures and the creation of assets, in contrast to the union government, which took loans to pay off its debts. He said, “We engaged in irrigation projects like the Kaleshwaram project, Mission Bhagiratha, Mission Kakatiya, and other programmes, which in turn developed assets for the state. Telangana’s debt ranking in India, according to a study by the Reserve Bank of India, is number 23.

The minister further asserted that with an increase of 11.5% over the previous eight years, Telangana has risen to the top spot in terms of state-owned tax income. “With 9.7%, Odisha came in second, while Haryana was just behind it with 9.2%. Similar to this, Telangana’s contribution to GDP climbed from 4% to 4.9% in the previous eight years while making up only 2.9% of the country’s population,” he said.

“In contrast to the BJP administration, which forgave corporate debts to help its buddies, we improved the state’s riches and distributed among the needy,” he stated. He also cited the Comptroller and Auditor General’s (CAG) criticism of the union government’s use of off-budget loans of roughly Rs 6 lakh during the previous five to six years.

The Union Finance Minister Nirmala Sitharaman and other BJP leaders’ claims on the per capita debt owed by each state resident were also refuted by Harish Rao. He said that Telangana’s indebtedness was Rs 94,272 per person, compared to the central government’s per capita debt of Rs 1,25,679 per person.

He accused the BJP of destroying the federal spirit to achieve its motto of “weaker states, stronger centre”.

The Telangana government achieved “Saaphalyam, Sankshemam, Saamarasyam” (success, welfare, and harmony), while the BJP made “Viphalam, Visham, and Vidvesham” (failure, poison, and hatred) its policy, Harish Rao remarked.