The Telangana government has considerably reduced its Budget estimates on Central grants from Rs 21,720 crore last year to Rs 12,400 crore this year going by its experience last year. For the financial year 2014-15, it had estimated Rs 11,781 crore under plan grants, but the Centre gave only Rs 4,147 crore. Similarly, in case of non-plan grants, it had estimated Rs 9,939 crore, but got only Rs 1,346 crore.

The Telangana government continues to pin its hopes on earning Rs 13,500 crore through regularisation of lands and buildings and sale of lands, though it could not earn anything from these schemes last year though estimated at Rs 6,500 crore. However, finance minister Etela Rajender justified doubling of land earning estimates saying that they have a 12-month period to implement these schemes.

“Last time, when the LRS scheme was introduced, there was no time. It was launched in January and concluded by the end of February. By the time, we can take the scheme to the public, the deadline was over. But this time, we have a full year from April 2015 to March 2016. We are confident of earning Rs 13,500 crore through regularisation as there are lot of illegal lands and buildings in the city and other municipalities,” he said.

The minister added that the estimated tax devloution from the Centre to the state was Rs 12,823 crore in 2015-16 against Rs 21,720 crore last year.

“The Centre has drastically reduced plan grants to states from Rs 3,14,814 crore last year to Rs 1,80,293 crore this year. Consequently, plan grants to Telangana State from the Centre are budgeted at Rs 6,497 crore compared with Rs 11,781 crore last year. For this reason, we could not raise the Telangana plan outlay,” he added.

The finance minister found fault with the Centre for asking states to confine itself to 3 per cent loan limit of Gross State Domestic Product. He said, “It is ironical that the Centre has budgeted for a fiscal deficit of 3.9 per cent of the GDP in 2015-16 but states are being asked to limit it to 3 per cent. A revenue surplus state like Telangana should be allowed to take loans up to 4 per cent of GSDP,” he said.