Tax devolution fell short by `5,000 cr

Of these, 55 will be permitted in the GHMC limits, while 19 will be located in GHMC periphery and the remaining in districts. Telangana already has

800 bars and 27 clubs that serve liquor, besides 2,144 liquor shops.

The government would earn nearly `50 crore through licence fees itself to set up bars at the average licence fee of `30 lakh per bar.

The state government waited for the Union Budget to kickstart its budgetary preparation exercise, with a fervent hope that the Centre would increase tax devolution to states, increase the FRMB limit to five per cent so that it could augment its financial resources to combat the Corona-induced financial crisis. However, all these hopes were dashed after the budget was unveiled.

The tax devolution, Telangana’s share in Central taxes, came down to 2.102 per cent for 2021-22 from 2.133 in

2020-21 as per the recommendations of the Fifteenth Finance Commission. In fact, it was on a higher side at

2.437 per cent in 2019-20, when the recommendations of Fourteenth Finance Commission were in force.

The state government was hoping to garner

`18,000 crore towards tax devolution in 202122. A thorough analysis done by the finance department on the Union Budget concluded that Telangana would not get more than

`13,390 crore.

Rubbing further salt to wounds, the Centre has imposed an agri cess on petrol and diesel, and to ensure the additional cess does not burden motorists, the Centre reduced excise duty on

fuel correspondingly.

Excise duty comes under Centre’s tax, which it shares with states as part of tax devolution. But the entire amount accrued through cesses go directly to the Centre and there is no need for the Centre to share a portion of cesses with the states.

This proved to be a double whammy for Telangana, which is now looking at sale of lands and liquor to cover up these losses.