Telangana Chief Minister A Revanth Reddy has sought a raise in the allocation of states’ share in Central taxes to 50 per cent from the existing 41 per cent during a meeting with the 16th Finance Commission.
He also urged the chairperson and the members of the Finance Commission to consider restructuring the debt of Telangana or grant additional financial assistance to tide over its current financial crisis as a large part of its revenue is used to repay its debt.
Addressing the members of the 16th Finance Commission on Tuesday at Praja Bhavan, the chief minister said, “I also strongly place my demand and I speak for all states on this – increase allocation of central funds to states from 41% to 50 %. I promise you, if you can do this, I will take a huge responsibility for Hon’ble Prime Minister Shri Narendra Modi’s vision to make a $5 trillion economy. I will make Telangana a $1 trillion economy.”
The chief minister also admitted that the state was reeling under its mounting debts. “We have a heavy burden of debt which stands at over Rs 6.85 lakh crore at the end of last financial year. It includes both budgeted and off-budget borrowings. Large loans, borrowed in the last ten years, have now created a situation where a significant part of our revenues is used just to repay debt,” he said, blaming the previous BRS government for the precarious financial situation of the state.
He admitted that unless Telangana manages its loans and interest payments, it won’t be able to arrest the slump in the state’s progress. “We seek your support in helping us address this problem. Give us options to either restructure debt or kindly offer us additional assistance,” he urged the members of the commission.
The chief minister told them, “We seek cooperation from the Centre in strengthening fiscal federalism. We want the Finance Commission’s recommendations to be in that direction.”
Deputy Chief Minister and Finance Minister Bhatti Vikramarka Mallu urged the commission to grant more autonomy to the states in the implementation of Centrally sponsored schemes so that they could address their specific developmental needs effectively.
He pointed out that some expenses, which have often been mislabelled as ‘freebies’, were necessary welfare programmes. For instance, schemes like farmers’ incentives or Rythu Bharosa, farm loan waivers and food subsidies which bring economic stability and social security to weaker sections.
“We urge the Commission to recognise these programmes as necessary investments for the welfare of our people,” said the finance minister.