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Harish Rao counters Kishan Reddy’s claims of Central assistance

Stating that the Union Minister’s power point presentation was filled with baseless claims and falsehoods, Harish Rao said Kishan Reddy’s repetitive use of unfounded statements highlighted his desperation

Published Date – 09:38 PM, Sat – 17 June 23

Harish Rao counters Kishan Reddy’s claims of Central assistance
File photo

Hyderabad: Punching holes in a series of claims made by Union Minister G Kishan Reddy on Saturday, Finance Minister T Harish Rao said the BJP leader lacked focus and was spreading confusion.

Stating that the Union Minister’s power point presentation was filled with baseless claims and falsehoods, Harish Rao said Kishan Reddy’s repetitive use of unfounded statements, previously propagated by Amit Shah, highlighted his desperation, he said.

One of Kishan Reddy’s claims revolved around personal loans issued by banks. The Centre, Harish Rao retorted, should be ashamed of taking credit for loans extended by banks to individuals.

“The distribution of taxes is a constitutional right of States, and it is important to note that the distribution is not part of the Consolidated Fund of India. Despite the Finance Commission’s recommendation of a 41 percent share of central taxes for all States, they receive only approximately 30 percent due to the inclusion of cesses and surcharges, which do not contribute to the shared tax pool. Telangana’s share in tax distribution has decreased from 2.893 percent in 2014-15 to 2.102 percent in 2021-22,” Harish Rao said.

Kishan Reddy also claimed that 100 percent of houses in Telangana got access to tap water because the Centre contributed Rs.1588.08 crore through Mission Bhagiratha.

“The reality is that the total amount provided by the Centre is insufficient even for maintaining Mission Bhagiratha, which has incurred expenses of Rs.36,000 crore. Can Kishan Reddy provide any evidence to support his misleading statements?” Harish asked.

“Kishan Reddy also attempted to highlight the special treatment provided by the Reserve Bank of India (RBI) through the Ways and Means facility. It is essential to clarify that this facility, which assists States in balancing revenue and expenditure, is available to all States, including Telangana. Telangana, like any other state, is subject to an interest rate of approximately 6 percent on these advances. Kishan Reddy’s assertion that the RBI is extending special treatment is baseless,” he said.

Another falsity was related to Kishan Reddy’s statement that there was collection of Rs.34,737 crore as GST compensation cess from Telangana between 2017-18 and 2022-23. However, Telangana received only Rs.8,927 crore as compensation, while the GST cess collected from the state amounted to Rs.10,285 crore in the first two years of GST implementation, the Finance Minister said.

“It is important to clarify that the compensation funds do not come from the Consolidated Fund of India but from the GST Compensation Fund. Therefore, the claim made by the Centre regarding GST compensation payments is incorrect, as it is Telangana’s rightful due,” he said.

Under Section 94 (2) of the State Reorganization Act, an amount of Rs.2,250 crore was allocated for development of backward districts over a span of five years. However, no funds were released for 2019-20, 2020-21 and 2022-23, despite the Act’s purpose of supporting development of backward areas. Even though a Central team expressed satisfaction with Telangana’s progress during their visit, an unjustified withholding of Rs.1,350 crore occurred for these three years. Kishan Reddy must address this matter, he said.

“Kishan Reddy also tried to assert that the funds allocated to national highways come from road and infrastructure cesses. However, it should be noted that the funds allocated to Telangana for national highways do not come as a result of Kishan Reddy’s generosity, but rather from the designated road and infrastructure cesses. There is no additional burden on the Centre in this regard,” Harish Rao said, also stating that it was absurd for Kishan Reddy to claim that the Centre spent Rs.1.58 lakh crore on procurement of food grains from Telangana.

“In reality, a significant portion of these costs is recovered by the Centre through the sale of these food grains under the Public Distribution System. Did Kishan Reddy forget that union Minister Piyush Goyal once ridiculed the people of Telangana by offering them free advice to consume broken rice?” the Finance Minister asked, also raising a question on the claim of fertilizer subsidy Rs.33,000 crore.

“Wasn’t this subsidy already being provided by previous governments? It is important to clarify that this subsidy is not directly benefiting the farmers of Telangana but rather fertilizer companies located in the State. How can a subsidy to a fertilizer company be considered a subsidy for Telangana farmers?” he asked.

Harish Rao also said Kishan Reddy’s insinuation that the Reserve Bank of India (RBI) was not an independent institution was baseless. The RBI operates independently and provides financial assistance, including overdrafts, to all States as needed, he said.

Stating that Kishan Reddy should explain why guarantees outlined in the Bifurcation Act were not fulfilled and also the reality of the Bayyaram Steel Factory and the Kazipet Coach Factory, Harish Rao said the Union Minister should focus on delivering the promised funds for the Bibinagar AIIMS.

“It is disheartening to witness the lack of progress and the indifferent attitude of the Centre towards healthcare needs of Telangana. While the Ayushman Bharat scheme may provide nominal support, the Aarogyasri initiative undertaken by the State government offers substantial benefits to the people,” Harish Rao said.

Telangana has been persistently raising concerns about the due compensation amounting to Rs.723 crore, which the Finance Commission has been requesting for the last three years. Similarly, an amount of Rs.495 crore, mistakenly deposited in Andhra Pradesh’s account, has been pending for nine years without any resolution. Despite Niti Aayog‘s recommendation to allocate Rs.24,205 crore for Mission Bhagiratha and Mission Kakatiya, the Centre has failed to respond. This apathy towards crucial developmental projects raises serious questions about the Centre’s commitment to the welfare of Telangana, he said.

Telangana incurred losses of Rs.30,000 crore due to the provision of electricity meters for bore wells, and an additional loss of Rs.15,033 crore from changes in FRBM regulations. If the share of 41 percent in taxes was properly implemented, the State would receive an additional Rs.33,712 crore in arrears, he said, also asking Kishan Reddy to explain why the Centre was withholding Rs.1,43,000 crore from Telangana.

It is also imperative to compare the support and resources provided to Telangana with those allocated to other States, such as Gujarat. Only by presenting a comprehensive picture can we truly evaluate the fairness and equity of the Centre’s actions, Harish Rao said, adding that only a fraction of the false claims made by Kishan Reddy was addressed. The rest would be done soon.

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