In his first Independence Day speech, Telangana Chief Minister A. Revanth Reddy revealed alarming facts about the state’s escalating debt, which skyrocketed from Rs 75,577 crore in 2014 to Rs 7 lakh crore in 2024. The Congress government aims to tackle this issue by avoiding high-interest loans and fulfilling election promises like writing off farm loans up to Rs 2 lakh. Despite Telangana’s strong economic growth, challenges persist due to mismanagement and unsustainable borrowing practices from the previous K. Chandrashekar Rao regime. The state seeks support from the World Bank to alleviate its financial burdens and improve transparency in welfare schemes marred by corruption and inefficiency.
Telangana’s Financial Struggles: A Report from the Ground
Recently, Chief Minister A. Revanth Reddy addressed the people of Telangana on Independence Day, marking his first speech on such a significant occasion. The news was not uplifting. He revealed that since the state’s formation in 2014, Telangana’s debt has skyrocketed from Rs 75,577 crore to a staggering Rs 7 lakh crore by March 2024. This increase has left the state’s finances in a precarious state. However, there’s a glimmer of hope; during a trip to the US, the World Bank expressed interest in helping the state manage some of its high-interest loans, which Revanth believes could relieve some of the financial pressure inherited from the previous administration led by K. Chandrashekar Rao (KCR).
In light of these challenges, the new Congress government has issued a white paper detailing the state’s financial status. Revanth assured citizens that his government would avoid the mistakes of high-interest borrowing and reaffirmed their commitment to fulfill promises made in the Congress manifesto, particularly guaranteeing farm loan waivers up to Rs 2 lakh. This initiative, though heavily criticized by opponents, demonstrates the government’s focus on supporting farmers.
When Telangana was created, it was a revenue surplus state, but over the past ten years, it has seen a significant increase in its total liabilities. This alarming trend indicates that outstanding loans now account for more than 35% of the state’s Gross State Domestic Product (GSDP), surpassing the permissible limits set by the Finance Commission.
Despite these financial hurdles, Revanth pointed out that Telangana’s economy has a strong growth rate of 12.9%, well above the national average of 10.1%. The CM highlighted that the state plays a significant role in the national GDP, contributing 5.1%, while having a per capita income substantially higher than the national average.
The situation is concerning not only for Telangana but also for neighboring states like Tamil Nadu, which bears an even heavier debt burden. To complicate matters, a considerable chunk of Telangana’s debt arises from off-budget borrowings related to ambitious projects like the Kaleshwaram Lift Irrigation Scheme, which has faced scrutiny for its financial management and questionable contracts.
As Telangana navigates these treacherous financial waters, it becomes increasingly clear that accountability, transparency, and sound fiscal management are paramount to restoring the state’s economic health and ensuring a prosperous future for its citizens.
With these pressing issues at hand, the government must act decisively to stabilize the financial situation while maintaining the trust of the people as it pushes forward with its developmental agenda.
Tags: Telangana, A. Revanth Reddy, debt burden, financial challenges, agriculture, Kaleshwaram Lift Irrigation Scheme, state economy, Congress government.
What is the debt situation in Telangana under the KCR government?
The KCR government has increased Telangana’s debt significantly, making it one of the highest in the country. This has raised concerns about financial stability.
Why has the debt increased so much?
The debt has increased due to heavy spending on welfare schemes, infrastructure projects, and salaries for government employees. While these are important, they have led to a high borrowing level.
How does this debt affect the common people?
High debt can lead to increased taxes or cuts in public services in the future. It may also limit the government’s ability to invest in new projects.
Are there any benefits to the spending causing this debt?
Some people believe that the welfare schemes and infrastructure improvements have helped many families. However, the long-term impact of high debt could be harmful.
What can be done to manage or reduce this debt?
To manage the debt, the government needs to focus on increasing revenue, controlling expenses, and finding a balance between spending and borrowing. This could help ensure financial stability for the state.
