The economic slowdown’s impact on Telangana might have political repercussions on the ruling Telangana Rashtra Samithi’s (TRS) prospects in the upcoming municipal elections.
A senior TRS legislator said that the slowdown has resulted in a decrease of funds for welfare programmes (like the flagship input subsidy Rythu bandhu scheme for farmers) and that the state government will not be able to announce any developmental projects in the coming days.
Telangana, which had registered an average of 21.49% of tax revenue growth rate in the last five years (after its bifurcation from Andhra Pradesh), saw that coming down to 5.46% in the first quarter of this financial year, which was much lesser than the estimated 15%. It has now forced chief minister and TRS supremo K. Chandrashekhar Rao (KCR) to give lesser funds to all state government departments, which have also been asked to cut down expenditure.
“There is no link to the state budget and coming municipal elections as such. The Centre is not giving us our due share, so for that someone has to go and bargain with them. People like us, who are not supporting the BJP in the parliament, are not getting finances. Maybe they want us to beg them for money. Because of the current financial situation, our welfare programmes may slow down, but they won’t stop completely," said the senior TRS legislator, who did not want to be quoted.
He however added that economic slowdown will however not allow the state government to announce any upcoming developmental projects as of now. “We will study the situation and see how it works out," he added. A total of 140-odd municipalities are set to go to polls. Earlier in November, a statement from KCR’s office had said that his government is ready to conduct it.
However, the Telangana State Election Commission, the body which conducts and oversees local body polls, is yet to give a date. Last week, KCR wrote to union finance minister Nirmala Sitharaman, asking her to give the state more Goods and Services Tax (GST) compensation, given the shortfall in collections this financial year.
In his letter to Sitharaman, KCR said that according to the union budget 2019-20, the tax devolution to Telangana is ₹19,719 crore, out of which the state has received only ₹10,304 crore till November. KCR pointed out that Telangana had received ₹16,451 crore in tax devolution in 2018-19, and had in fact received ₹224 crore more till November during the last financial year. “The economic situation is in a state uncertainty," his letter had stated.
Earlier in September, while presenting a revised budget, KCR cut the state’s total expenditure for 2019-20 to ₹1.46 lakh crore from the projected ₹1.82 lakh crore projected in February, citing economic slowdown in the country. The issue will put more pressure on him and the state apparatus, given about 60 lakh land-holding farmers in the state have to be paid ₹4,000 per acre for both the Rabi and Kharif seasons under the ‘Rythu Bandhu’ input subsidy scheme alone.
Political analyst Palwai Raghavendra Reddy however said that KCR is not someone who acts without a plan. “I would say that KCR is smart and he knows how to act at the right time. If he is holding on to something now (plan), he will use it at the appropriate time. There is a possibility that KCR might use the money he has now, just before the municipal elections (for developmental work)," he added.
Earlier in October, the TRS also snatched the Huzurnagar assembly seat from the Congress in a bye-election. The assembly segment was considered to be a bastion of the grand old party. TRS’s S. Saidi Reddy defeated his nearest rival Padmavathi Reddy of Congress by 43,348 votes in what turned out to be a one-sided contest, proving wrong all predictions of a close fight.