Chief Minister K. Chandrasekhar Rao has finalized the annual budget prepared by the Finance Ministry for the year 2021-22. The state cabinet, which will meet at 7 pm on Wednesday under the chairmanship of the CM, is expected to approve the budget. The budget will then be tabled in both houses on Thursday.
The annual budget is expected to meet the aspirations of the people in the wake of the gradual removal of the corona blueprints on the state’s financial situation last year. Although the economy was severely damaged last year due to the corona, it has bounced back with a rise in revenue in just a few months. It is learned that the government, which has given priority to welfare in the wake of the severe financial crisis, will continue that trend in the coming budget.
The Finance Ministry has already finalized the budget proposals. The budget will be approved by the state cabinet meeting on Wednesday night chaired by CM K. Chandrasekhar Rao. Later on Thursday, Finance Minister T.Harish Rao will introduce the budget in the Assembly. This time the budget is known to be huge. State Gross Domestic Product (GSDP) along with its own revenues is better than the national average and other states. Officials expect revenue to outperform expenditure in the coming fiscal year on the back of rising revenue over the past four months.
He says the revenue surplus is likely to show up next year. Even during the corona crisis, agriculture, through its allied sectors, grew beyond expectations. Crop yields were high despite the damage to the service and production sectors. Revolutionary changes in the irrigation system have taken place as the state government has increased the investment cost anticipation. This led to a huge increase in crop production. The gross wealth of agriculture, which was less than 6 to 10 percent at the time of the emergence of the state, has now increased to 20 to 25 percent.
Revenue and capital revenues are expected to grow to Rs 1,82,914 crore in the current fiscal, ending this month. This is expected to be driven by higher revenue growth over the past four months and GSDP growth.
Among the states that have made a monolithic ‘V’ shape of progress back to the collapse of economies due to the corona, Telangana has been at the forefront with revenue from GST and VAT reaching Rs 50,000 crore. The total was estimated at Rs 1,76,393 crore, up from Rs 1,18,977 crore at the end of January. The target is expected to be reached by the end of this month. This time, it is estimated to generate Rs 85,000 crore from its own revenues, but so far it has reached Rs 60,000 crore. Information that the budget will be optimistic as the revenue will increase massively this month.
The investment cost is 25 percent
In the joint state, only Rs 59,000 crore was spent under-investment expenditure in the decade 2004-14. Over Rs 1.60 lakh crore has been spent on investment in the first arenas since the emergence of Telangana. This is higher than the percentage of allocations in the central budget. Allocations under-investment expenditure in the central budget is less than 10 to 12 percent. Many states are also allocating less than 10 to 20 percent of the investment cost.
But in Telangana, these allocations are between 20 and 25 percent. The state government, which has given top priority to agriculture and irrigation in its investment expenditure allocations, has since been spending heavily on transport, infrastructure for industries, and the development of mineral resources. As a result, the state is registering growth in GSDP.
Preference for irrigation
In 2014-15, when Telangana was formed, it spent Rs 8,372.94 crore under-investment expenditure, and the next year it was Rs. 13,590.39 crores. Allocations increased to Rs 33,370.57 crore in the following year. Up to Rs 25,000 crore has been earmarked for irrigation projects in 2019-20. The investment expenditure in the 2020-21 budget for the current financial year is shown as Rs 22,000 crore. Investment expenditure through the budget and non-budgetary funds is crossing 30 percent. With the mission to provide fresh water to every household in the state, the government has spent funds other than the budget for massive projects like Mission Bhagiratha.
The resulting ‘investment’ strategy from the first year of the formation of Telangana, the state government has focused on future wealth creation. The government’s far-sighted spending on irrigation, agriculture, etc. is yielding amazing results. The government has kept a balance in every budget by allocating funds for future wealth creation while investing heavily in development and welfare. Allocations to agriculture, irrigation projects, transport, infrastructure, mineral development, etc. are referred to as capital expenditure.
The first four years after the formation of the state began to bear results from the fifth year onwards, with massive funding for investment expenditure. Agricultural production has increased tremendously, especially with allocations made for the construction of projects for irrigation. Today, agricultural products make up the bulk of the state’s wealth. The agricultural sector, which has so far accounted for less than 10 percent of the state’s gross domestic product (GDP), has grown by more than 40 percent in the current financial year. From the beginning, IT and services were the lion’s share of the state’s GSDP.
But with the government spending heavily on the irrigation sector, the agriculture sector has also been able to thrive during the crisis. The agriculture sector has survived a time when service sectors across the country are squatting. While the country’s gross domestic product (GDP) is on the decline in the current financial year due to the corona, the state’s GDP is on the rise with the boom given by agricultural products.