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Congress claims TRS, KCR have pushed Telangana into financial crisis

Congress leader, Shabbir Ali, asked Telangana Finance Minister Etala Rajender to explain as to what went wrong to the projections which he made in last two budgets.

telangana budget, telangana debt, telangana financial crisis, telangana funds, telengana news, hyderabad news, KCR, Telangna KCR, trs, Shabbir Ali Telangana Chief Minister K Chandrashekar Rao. (Source: PTI)

Leader of Opposition in Telangana Legislative Council Mohammed Ali Shabbir has accused Chief Minister K Chandrashekar Rao of turning Telangana from richest to a bankrupt State.

Addressing a press conference at Gandhi Bhavan on Wednesday, Shabbir Ali said the mismanagement and mal-administration by TRS Government has pushed Telangana into financial crisis.

At the time of formation of Telangana on June 2, 2014, the state was considered rich with a revenue surplus of Rs 7,500 crore. However, in the last 14 months, the situation has reversed and now the state government is struggling hard to borrow at least Rs 5,000 crore to pay salaries, pension and clear crop loan waiver dues.

Ali claimed that the State not only lacks funds to spend on welfare and development schemes, but it is also unable to pay salaries and pensions on time. The notifications for 25,000 jobs, which KCR promised to issue in July, too have been delayed due to financial crisis.

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Shabbir Ali asked Finance Minister Etala Rajender to explain as to what went wrong to the projections which he made in last two budgets.

While presenting the first budget of Rs 100,637 crore on November 5, 2014, Etala claimed that the state will have a revenue surplus of Rs 301.02 crore. However, the state government spent only about Rs 60,000 crore in 2014-15. Similarly, in his second budget presented on March 11 this year, Etala stated that the budget of Rs 115,689 crore for 2015-16 will have a revenue surplus of Rs 531 crore. He also showed a video clipping of the chief minister’s statement made in Assembly wherein he claimed that Telangana is the second richest state after Gujarat.

The Congress leader pointed out that the state government has recently borrowed Rs 1400 crore from the open market for 10 years at 8 per cent interest by participating in the State Development Fund auctions held by Reserve Bank of India. He also held KCR’s negligent attitude responsible for the deduction of Rs 1,274 crore by the RBI towards IT liability of AP Beverages Corporation Limited. “When Andhra Pradesh Government could manage to prevent deduction of its share of Rs. 1700 crore in the same account, why did the Telangana Government failed to do the same?” he asked.


Shabbir Ali said even if the RBI is to be blamed for directly deducting Rs. 1,274 crore towards IT liability, the TRS Government needs to explain the reasons for the present deficit of over Rs. 5,000 crore.

The Congress leader also blamed KCR’s tall talks for the present financial condition. “TRS Government’s tall claims before the 14th Finance Commission too proved very costly for the State. It projected that in the next five years, Telangana will have a revenue surplus of Rs. 21,972 Crore. As against the receipts of Rs. 391,256 crore, the estimated capital expenditure was estimated at Rs. 369,284 crore. Based on these claims, the Finance Commission did not approve any grant-in-aid to Telangana till 2019-20. Further, it also reduced Telangana State’s share of Central Tax Divisible Pool (CTDP) from 2.91% to 2.48%. Contrary to this, the 14th FC included AP among the 11 revenue-deficit State and it will get grants-in-aid of Rs 22,113 crore. AP’s share in CTDP too has been increased to 4.30%,” he said.

Shabbir Ali said by making tall claims, KCR has directly benefitted the AP Government while causing huge damage to Telangana. Shockingly, he said, the TRS Government remained silent on the actions of RBI and Central Government and did not even register strong protest.


He said the State Government immediately needs at least Rs. 5,000 crore to clear salaries (Rs. 2,000 Cr), pensions (Rs. 800 Cr) and dues of second installment of crop loan waiver amount (Rs. 2250 Cr). He also claimed that the State Government did not fully release Rs. 2,200 crore, which it sanctioned towards dues of second installment of crop loan waiver.

The financial constraints have also delayed the issue of job notifications as recruitment of 25,000 staff will increase the salary bill by Rs. 900 crore. The State’s salary bill has already increased by Rs. 7,000 crore from Rs. 18,400 crore at the time of formation of Telangana to nearly Rs. 25,000 crore now. “Only eight days are left in July and nothing has been done to issue job notifications,” he said. Shabbir Ali demanded that the Chief Minister take a serious note of the State’s financial position and initiate corrective steps. “KCR’s inexperience, mismanagement and mal-administration are primarily responsible for the present crisis. At least, now he should get serious in managing State’s finances,” he said.

Stating that farmers across Telangana State have lost almost 90% of crops due to bad monsoon, he asked the Chief Minister to give an assurance to the farming community so as to prevent further suicides. He said that the youth needs to be re-assured that they would be provided jobs, as promised.

First published on: 22-07-2015 at 05:36:23 pm
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