Falling revenues and ever rising expenditure are forcing the Telangana into a vicious circle. The KCR government is now looking to mop up additional revenues to fund its flagship welfare programmes. The very schemes that helped the TRS to come back to power with a resounding majority in 2018 are now turning out to be millstones around its neck. The Government needs Rs 6000 crore for loan waiver, Rs 12000 crore for the Rythu Bandhu scheme, Rs 1137 crore for the crop insurance scheme, Rs 8000 crore for power and other subsidies Rs 2714 crore for pensions and Rs 2714 crore for the gram panchayats. Key schemes like Kalyanalakshmi, Shadi Mubara and others are also proving to be quite burdensome.
The Telangana government's expectation that the revenue will be 15 percent more than that of the last year has also been belied. The growth rate is just 5.46 per cent.This only means that the State Government has to look for other sources of income. The Government will have to either get additional revenue either through tax or through other means if it wants to continue with the welfare schemes.
The state had a revenue surplus of Rs 236 crore and Rs 199 crore in 2016-16 and 2016-17 respectively. In 2017-18, the Telangana government expected a surplus of Rs 4571 crore. However, the income plummeted and the expenditure increased leading to a revenue deficit in the state. KCR, who is also holding the finance portfolio, has discussed the issue with the officials and has asked them to come up with different sources of revenue. He is in a classic catch 22 situation. He can neither tax the people, nor can stop the welfare schemes.