Union Finance Minister Nirmala Sitharaman said here on Saturday that the Telangana government was servicing its debt on Kaleshwaram lift irrigation project by paying interest in the range of 8.25 to 10.9% per annum.
Quoting an RTI reply on debt servicing for the multi-crore project, Ms. Sitharaman asked at a media conference whether such a high interest rate was sustainable. Even the cost of running the water pumps of the motors was not sustainable.
‘No DPR’
The State government grounded the project without preparing the detailed project report. This escalated the project cost from ₹40,000 crore to ₹1.40 lakh crore, she said. The Minister asserted that the State was burdened with borrowings outside budget, which the government accepted but urged the Centre not to club them with budgeted loans for the purpose of remaining within Fiscal Responsibility and Budget Management limits.
The out of budget borrowings were done by State Public Sector Undertakings, which had their own revenue sources but lacked repayment capacity because the quantum of credit was huge and targeted by the government for other purposes. This was unacceptable to the Centre.
“You might get the money in the name of Transco or Genco and spend it for your needs. Ultimately, will these agencies pay or the government?”, she asked.
‘No role in devolution matters’
Answering the frequent complaints of the government that the devolution of taxes was not in proportion with the revenues generated by the State, she said that the Centre had no ‘space’ in devolution matters as they were fixed by the Finance Commission. Moreover, taxation principles did not work in the way that States contributing higher to the Central pool of taxes should get more.
She also rebutted the criticism of Chief Minister K. Chandrasekhar Rao that the “Centre resorted to backdoor methods of collecting taxes in the name of cesses”. The cess collected on education, health and infrastructure will be ploughed back to States for spending on the same segments, she said.
Ms. Sitharaman criticised the State government for not spending the ₹188 crore released by Centre under the National Disaster Relief Fund for crop loss due to the floods in October 2020. After the High Court ordered relief to the affected farmers, the Centre released the funds in February 2021 but the State had filed a Special Leave Petition in Supreme Court where the case was pending. The government had no answer to the question of the apex court whether the money released by the Centre was distributed.
‘Not rude’
She denied she was rude to Kamareddy Collector when she visited a fair price shop on Friday. She said she only demanded from him to display the photo of Prime Minister at the shops because the Centre’s money was involved in rice distribution for the poor.
