T Harish Rao tells Cen- The New Indian Express
Express press service
HYDERABAD: Arguing that state revenues have declined and spending has increased due to Covid-19, Finance Minister T Harish Rao on Friday asked the Center to increase the state’s borrowing limit from 3% currently to 5% under fiscal responsibility and budget management law (FRBM).
Attending the 43rd BRKR Bhavan Goods and Services Tax (GST) Council meeting in a video conference, Harish Rao said Telangana was getting the lowest GST compensation from the Center.
While the budget deficit of all states stood at 36.3%, Telangana’s budget deficit was 23.10% in fiscal year 2021-22, he pointed out.
He added that state spending has increased and income has declined due to the current Covid-19 pandemic. He said the state government has spent huge sums of money on the health of the people.
Include Telangana in the Group of Ministers, Harish urges Nirmala
Harish Rao asked Union Finance Minister Nirmala Sitharaman to increase the FRBM limit from 3% to 5%. âWe received Rs 2,638 crore integrated tax funds last year. This year approximately Rs 13,000 crore Integrated Goods and Services Tax funds have been transferred to the India Consolidated Fund from which the Telangana is to receive Rs 218 crore. Release these funds immediately, âhe said. He also called for states to receive full compensation from the GST, as this was the last year to pay additional compensation. Harish Rao also said that since Telangana has races, the state should be a member of the Group of Ministers.
It can be recalled here that the central government recently set up a panel of ministers of state for a better evaluation of the services of online gaming portals, casinos and racetracks for the collection of the tax on products and services ( TPS). At present, horse racing, casino and online gaming services attract 18 percent of the GST and the GoM will decide how the services are valued. He also demanded that neutral alcohol not be subject to the GST. âOnly gasoline, diesel and excise taxes have been left to the states. The Center was getting more income in the form of transfers and surcharges.
In the last fiscal year, of total central government revenue, 18 percent was achieved through central taxes and surcharges. The total central government budget in the last fiscal year was Rs 22.17 lakh crore, of which Rs 3.99 lakh crore income was realized through cesses and supplements. At the same time, all states were losing Rs 1.64 lakh crore, or 41% of their income, to the central government in the form of transfers and surcharges, âhe said.
Telangana alone lost 3,439 crore rupees each year, or 2.102 percent of her income. âAs requested by all states, the Center should exempt plain alcohol from the GST. The inclusion of neutral alcohol would further reduce state revenues, âhe said.