Telangana’s Financial Landscape: A Crossroads
The presentation of Telangana’s Budget for the financial year 2024-25 by Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka on July 25th, 2024, marks a pivotal moment for the state. As the newly elected Congress government takes the helm, they are tasked with addressing the significant financial challenges inherited from the previous administration.
The Budget paints a sobering picture of Telangana’s economic landscape. In the 10 years since the state’s formation, the outstanding public debt has ballooned from ₹75,577 crore to an alarming ₹6,71,751 crore. However, this staggering accumulation of debt has not translated into commensurate development, as the Finance Minister lamented.
“Debts which stood at ₹75,577 crore at the time of Telangana formation in 2014 grew by leaps and bounds in the 10 years to touch a humongous figure of ₹6,71,751 crore. However, there was no commensurate development,” said Mallu Bhatti Vikramarka, underscoring the urgent need to address this imbalance.
Addressing the Fiscal Deficit: A Delicate Balance
The 2024-25 Budget reflects the government’s commitment to fiscal prudence, targeting a fiscal deficit of ₹49,255 crore, or 3% of the Gross State Domestic Product (GSDP). This is a slight improvement over the revised estimate for 2023-24, which stood at 3.4% of GSDP.
To achieve this, the state plans to increase its total receipts (excluding borrowings) by 33% to ₹2,24,802 crore, while containing the growth in total expenditure (excluding debt repayment) to 25%, reaching ₹2,74,058 crore.
The government’s focus on revenue generation is commendable, as it seeks to reduce its reliance on borrowings. The state’s own tax revenue is projected to grow by 24% to ₹1,38,181 crore, with the Telangana Goods and Services Tax (TGST) contributing the largest share at 37%.
However, the state’s ability to manage its fiscal deficit will also hinge on its success in addressing the persistent issue of underspending in key sectors. The Budget analysis highlights that in recent years, there has been considerable underspending in schemes for tribal welfare, social welfare, and housing, among others.
Investing in Infrastructure: Balancing Priorities
The 2024-25 Budget prioritizes infrastructure development, with a significant emphasis on the Hyderabad metropolitan area. The government proposes to develop 78.4 km of extended Metro Rail corridors at a cost of ₹24,042 crore, aimed at improving the city’s public transport network and fostering equitable development.
Additionally, the Budget allocates ₹26,502 crore for the construction of a regional ring road, and ₹1,500 crore for the ambitious Musi Riverfront Development project. These investments in urban infrastructure underscore the government’s recognition of Hyderabad’s pivotal role in the state’s economic growth.
However, the state must strike a careful balance in its infrastructure spending, ensuring that other critical sectors, such as agriculture, healthcare, and education, receive adequate attention and resources. The Budget’s allocation for these sectors, while showing some increases, still falls short of the national average in some cases.
Empowering Agriculture and Rural Development
The agricultural sector has been a key focus area in the 2024-25 Budget, with a 73% increase in allocation to ₹51,463 crore. This includes ₹15,470 crore for debt relief for farmers, a crucial step in addressing the financial distress faced by the farming community.
Furthermore, the government has proposed the launch of a new scheme to provide ₹12,000 annually to agricultural laborers, recognizing their vital role in the state’s agricultural ecosystem. This initiative aims to improve the livelihoods of those who are often at the margins of the rural economy.
The Budget also allocates ₹10,245 crore for rural development, including ₹1,773 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Investments in rural infrastructure and employment generation can have a multiplier effect, strengthening the state’s agricultural backbone and promoting inclusive growth.
Enhancing Social Welfare and Empowerment
The 2024-25 Budget reflects the government’s commitment to social welfare and empowerment, with increased allocations for schemes targeting marginalized communities. The allocation for the Welfare of SC, ST, OBC, and Minorities has seen a 122% increase to ₹23,026 crore, including ₹2,000 crore for the Chief Minister’s Dalit Empowerment Programme.
Similarly, the Budget proposes ₹22,085 crore for Social Welfare and Nutrition, which includes ₹7,376 crore for the Aasara pension scheme. These investments in social safety nets and targeted interventions can contribute to greater equity and improved living standards for the state’s most vulnerable populations.
The government has also earmarked ₹33,124 crore for the SC Sub-Plan Fund and ₹17,056 crore for the ST Sub-Plan Fund, ensuring that funds are channeled directly to the development of these communities.
Strengthening Healthcare and Education
The 2024-25 Budget recognizes the critical importance of healthcare and education, two sectors that have faced neglect in the past. The allocation for the Health and Family Welfare Department has seen a 25% increase to ₹11,800 crore, reflecting the government’s intent to address the shortcomings of the previous administration.
Similarly, the Budget proposes ₹21,801 crore for the Education, Sports, Arts, and Culture sector, a 12% increase over the revised estimates for 2023-24. This includes ₹11,547 crore for assistance to local bodies for primary and secondary education, underscoring the government’s focus on improving access and quality of education across the state.
These investments in healthcare and education hold the potential to enhance human capital, improve overall well-being, and lay the foundation for sustainable development in Telangana.
Embracing Sustainability and Environmental Stewardship
The 2024-25 Budget showcases the government’s commitment to environmental sustainability and conservation. A notable initiative is the proposed development of eco-tourism in seven identified forest areas, including the Amrabad Tiger Reserve and Kawal Tiger Reserve.
This emphasis on eco-tourism not only aims to protect the state’s natural assets but also generate revenue and create employment opportunities for local communities. The Budget’s allocation of ₹1,064 crore for the Forest and Environment Department underscores the government’s holistic approach to environmental management.
Furthermore, the Budget proposes ₹1,500 crore for the Musi Riverfront Development project, a crucial step in reviving and restoring the vital waterway that runs through Hyderabad. This initiative, coupled with the investments in the city’s public transport system, reflects a broader vision for sustainable urban development.
Conclusion: Charting a Resilient Future for Telangana
The 2024-25 Telangana Budget presents a complex set of challenges and opportunities for the state. While the government grapples with the legacy of fiscal mismanagement, it is also seizing the chance to chart a new course that prioritizes sustainable development, social welfare, and equitable growth.
Through strategic investments in infrastructure, agriculture, healthcare, and education, the government aims to address the state’s long-standing disparities and lay the foundation for a more resilient and prosperous future. The emphasis on environmental stewardship and community empowerment further reinforces the administration’s commitment to inclusive and environmentally conscious development.
As Telangana navigates this critical juncture, the 2024-25 Budget serves as a roadmap for the state to tackle its fiscal woes, strengthen its foundations, and unlock the full potential of its people and resources. With unwavering determination and a focus on long-term sustainability, Telangana can emerge as a shining example of resilient governance and development in India.
