Telangana government is suffering from severe funds crunch after the newborn state witnessed a huge shortfall of targeted state revenues and resource transfers from the Center. Adding to that the revenue expenditure of the state is increasing day by day due to the salaries and pensions.
Thus financial crunch is adversely affecting the state’s grand plans like Mission Kakatiya, State Water Grid, mega irrigation projects on rivers Krishna and Godavari, new power projects across the coal belt, 2BHK housing scheme for poor as well as education and medicare sectors and the welfare of scheduled castes, scheduled tribes, backward classes, minorities and women.
Experts say the funds crunch may continue for the next four financial years. The 14th Finance Commission had suggested the state to be a revenue surplus and so all the grants-in-aid for the state are stopped. While AP gets 4.3% of central taxes, Telangana’s share was decreased to 2.48%. Adding to that the central government had scrapped eight central schemes and for other centrally sponsored schemes, the states are required to contribute higher share. This is adding up to the burden of the newborn state.
