Telangana Urges Finance Commission for Greater Fiscal Autonomy

 Telangana Urges Finance Commission for Greater Fiscal Autonomy

In a recent press conference, Telangana raised concerns over the growing challenges the state faces due to central policies, urging the Finance Commission to provide more flexibility and support to address these issues.

### Concerns with Centrally Sponsored Schemes (CSS)

The Telangana government highlighted the restrictive nature of CSS, which, according to state officials, limits their ability to cater to region-specific needs. The state's representatives emphasized that CSS guidelines often impose harsh conditions, making it difficult to deliver programs at the grassroots level. They called for greater autonomy to adapt these schemes to local circumstances.

### State Debt and Infrastructure Investments

Telangana currently faces a significant debt burden, surpassing ₹6.85 lakh crore. A major portion of the state's resources has been directed toward servicing this debt due to heavy infrastructure investments. The government requested support for debt restructuring or additional assistance to free up resources for further development.

### Call for Increased Share in Central Taxes

The state has proposed increasing the share of states in central taxes from 41% to 50%. Telangana argues that cesses and surcharges, which are not shared with states, have eroded their share of tax revenue. The state believes that increasing this allocation will provide much-needed fiscal space to address infrastructure gaps and welfare programs.

### Economic Disparities and Development Goals

Despite Telangana's high per capita income, officials acknowledged the significant wealth and income disparities across the state. Addressing these inequalities, they proposed reducing the weightage of income distance in determining horizontal devolution and suggested giving more emphasis on Gross State Domestic Product (GSDP) contributions. This, they believe, would incentivize productivity, investment, and job creation, while reducing regional disparities.

### Emphasis on Essential Welfare Programs

Telangana defended its welfare programs, often criticized as “freebies,” stating that they are essential for ensuring social security and economic stability. Programs like Rythu Bharosa and farm loan waivers, officials argued, are necessary to support vulnerable communities.

### Fiscal Challenges and Debt Levels

Telangana also highlighted its fiscal challenges, including a high fiscal deficit and growing debt. The state’s debt has increased from ₹91,428 crore in 2014-15 to ₹4.01 lakh crore in 2023-24, with off-budget borrowings further exacerbating the financial strain. While fiscal deficits have shown slight improvement, the state continues to face long-term financial burdens.

### Urban-Rural Disparities and Unemployment

The state reported significant disparities in growth between urban and rural areas, with urban centers like Hyderabad experiencing much higher growth. Additionally, the government flagged high unemployment rates, particularly among women and educated youth in rural areas.

### Health and Social Concerns

Health and nutrition were also raised as critical areas of concern, with growing cases of anemia among women and children, and an increase in malnourishment indicators. Social indicators in sectors like education were highlighted as areas where the state lags behind other regions.

### Pending Funds from the Centre

The Telangana government reiterated its call for the release of pending funds from the Centre, including ₹1,800 crore under the AP Reorganization Act and additional funds under various national schemes. These funds, according to state officials, are crucial for meeting budgetary needs and addressing ongoing infrastructure projects.

### Conclusion

Telangana's appeal to the Finance Commission focuses on gaining greater fiscal autonomy to manage its unique challenges and pursue more tailored development strategies. The state’s representatives emphasized that equitable fiscal measures and continued central support will be vital in addressing Telangana’s economic, social, and infrastructure needs.