Telangana’s finances continued to witness a shortfall in revenue receipts forcing the government to depend heavily on financial accommodation instruments such as special drawing facility (SDF), ways and means advances (WMA) and overdraft provided by the Reserve Bank of India (RBI) to meet its immediate needs.
The State depended on the SDF for all 31 days in October for raising ₹816.76 crore while it availed of ₹1,186.62 crore in the form of WMA on all days of the same month. It raised ₹493.38 crore through overdraft for 10 days during the same month.
The situation is much in contrast to the assertion of the previous Bharat Rashtra Samithi government which was against depending on the financial accommodation instruments owing to the “robust” fiscal situation. According to the monthly bulletin of the RBI, Telangana’s average WMA utilisation as per cent of the limit allowed was higher than 60% at the end of the first half of the current fiscal. The State was ranked alongside Jammu & Kashmir, Manipur and Andhra Pradesh whose daily WMA utilisation was around 60%.
While the State’s tax revenue after seven months was a shade higher than 50% of the budget estimates, the borrowings and other liabilities during the same period were at ₹33,378 crore, 87.3 % of the ₹38,234 crore projected in the budget estimates. The Comptroller and Auditor General of India’s report for October indicated that the State was in revenue deficit of ₹2,583 crore against the ₹4,881 crore surplus projected in the budget estimates and the fiscal deficit was ₹33,378 crore while the primary deficit was pegged at ₹20,421 crore against the ₹56,062 crore of the budget estimates.
Given this background, it will be a Herculean task for the new Congress government that took over the reins this month to meet its commitments in the form of the six guarantees it had promised to the people in the run-up to the elections.
