Telangana contributes to revenue-deficit states like AP

HYDERABAD: Andhra Pradesh Finance Minister Buggana Rajendranath Reddy's recent statement likening the state's fiscal deficit with Telangana stoked a fresh debate. In fact, it brought the issue and the facts surrounding it back into sharp focus.

Andhra Pradesh will be receiving a revenue deficit grant of ₹30,497 crore for the remainder of the duration of the 15th Finance Commission. AP's grant-in-aid component of its budget stands at 33 per cent.

On the other hand, Telangana is among the few states which are not entitled for revenue deficit grants by virtue of being revenue surplus states. Moreover, Telangana and the other revenue surplus states also contribute to the revenue deficit grants received by States like Andhra Pradesh which cannot meet their revenue expenditure.

Furthermore, Telangana's total grant-in-Aid is 22 per cent of the budget which is one of the lowest in India.

With 70 per cent of State-owned tax revenue, Telangana is at number 3 in the country, ranked only after Maharashtra and Haryana.

There is yet another indicator that puts Telangana in a league different from that of AP. The devolution grants that Telangana receives stands at eight percent, which is also the lowest in India.

Similarly, Telangana lost 0.34 per cent of devolution in the duration of the 15th Finance commission due to high development and low population, resulting in highest per capita income.

Popular perception says that the AP Finance minister's comparative claims on the revenue fiscal deficit of AP and Telangana pales in front of hard facts and statistics.