Union Budget 2023 a disappointment to Telangana as many of its demands remain unfulfilled

Union Finance Minister Nirmala Sitharaman presents the Union Budget 2023-24.
| Photo Credit: ANI

The Union Budget 2023 presented in the Parliament by Finance Minister Nirmala Sitaraman has come as a disappointment to the Telangana government which claimed that “there is nothing particular about Telangana”.

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Finance Department officials termed the Budget as “business like” and said the Centre had in fact reduced the outlay for national rural employment guarantee scheme at a time when the State was asking for enhancement of mandays under the scheme. “There are of course some positives such as focus on capital expenditure and fiscal consolidation, but most of the State’s demands remained unconceded,” they said.

A senior official said the incentive of enhancement of 0.5% fiscal deficit to States was of no big use to the State as it is anyway not participating in the power sector reforms as mandated by the Centre to avail it.

Strong pitch made by Finance Minister T. Harish Rao to bring down the share of cesses and surcharges as a percentage of gross tax revenue to a level not exceeding 10% remained unfulfilled.

The State expressed concern during the pre-Budget meetings convened by the Union Finance Ministry that its interests are being compromised with the increase in recourse to levy of cesses and surcharges by the Centre claiming that tax devolution to States as percentage of gross tax revenue of the Centre worked out to 29.7% in 2022-23 as compared with the share of 41% recommended by the XV Finance Commission.

“Thus, increase in the amounts collected through cesses and surcharges has not only compromised the recommendation of the Constitutional institution but also the interests of States,” Mr. Harish Rao lamented. There was, however, no announcement forthcoming in the Union Budget regarding redressal of the grievance raised by the State.

The Union Finance Minister did not also make any mention about the State’s request to make applicable the decision to prospectively treat the off-Budget borrowings raised by the State public sector corporations serviced out of the State Budget as State borrowings from the next fiscal year.

Regarding the Centrally sponsored schemes, Mr. Harish Rao said: “We request that apart from reducing the number of schemes, a State should be given the option of selecting a few schemes which suit its requirements. This will be in the interest of promoting cooperative federalism.” Ms. Nirmala Sitaraman, however, did not touch upon the subject during her speech in the Parliament.

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Another area of concern for the State has been the non-implementation of the promises made in the A.P. Reorganisation Act 2014 mandating the Centre to take fiscal measures including offer of tax incentives to promote industrialisation in the State.

Officials said so far, no major tax concessions have been offered to the State with exception of minor concessions in the depreciation rate.

The persistent demand for according national project status to Kaleshwaram project also went in vain as the Union Finance Minister did not touch upon the subject in her speech.