Telangana government’s over-the-top buildup to have a One Lakh Crore budget landed the new state in the danger of losing Central grants. The government or its officials have missed a basic rule. According to the rule book, Any state to receive the Central grants should maintain the fiscal deficit within the benchmark level of 3 per cent.
But in order to propose a big number budget, Telangana government has tabled the budget with estimated deficit of Rs. 17,000 crore. The deficit will mean that the fiscal deficit amounted to 4.79 per cent of GSDP. Central Grants are various funds given by the Union government to various projects with out interests. 22000 Crore of Central grants should come to the state usually but now they may not come due to the lack of financial discipline.
The budget session of Telangana is on and if the house approve it (which will be done anyways) the 22000 Crore Central Funds will be at the mercy of Central government with which the Telangana ruling government is constantly locking horns!