K Chandrasekhar Rao, the CM of Telangana, was so scared of losing the Greater Hyderabad Municipal Corporation (GHMC) polls as the fight got triangular that he was ready to bankrupt the state. Seeing the impending threat of losing, the CM had announced a series of freebies for the people of the city despite the worsening public finances of the state. Ahead of the civic polls, KCR waived electricity charges for shops in the city. Also, the water charges for the households within the city limits were waived off for usage up to 20,000 litres.
However, this freebie drive is actually leading the state towards bankruptcy. Now, to save the state from bankruptcy, the KCR led Telangana government is planning e-auctions of government land in a move to tide over the state’s financial crisis. His initial target from the auction is Rs 20,000 crore.
As per a report by India Today, the expenditure of the Telangana government is increasing exponentially. “Apart from funds for various development projects, there are other financial commitments too including payment of investment subsidy under the Rythu Bandhu scheme to farmers, and the additional burden imposed by the revision of salaries of government employees and the arrears due to them on that account,” reads the report.
The public finances of Telangana are worsening and the total borrowing by the state exceeded revenue in the first quarter of this fiscal year. The public debt of the state stands around 2.3 lakh crore rupees, but the state government did not refrain from the distribution of freebies in order to win the election. And now it is forced to sell the state land, although it came to power in GHMC in alliance with Owaisi led AIMIM, thanks to a series of freebies announced before the election.
Bijli and Paani (electricity and water) are becoming major issues in civic polls across the country and every political party promises free water and electricity since Kejriwal won Delhi polls on the same issues. However, this leads to worsening of the public finances of the state, and the distribution companies (Discoms), which are already the weakest link of the country’s power sector, are being increasingly burdened by irresponsible governments like that of KCR.
KCR wants to sell the government land and estimated in the state budget to earn 20,000 crores this. However, according to experts, given the depressed real estate prices since the pandemic spread, the state government will not be able to make much money out of this.
“Though construction work is being taken up by builders and developers, sales have not been encouraging. This apart, customer inquiries have dropped as they have delayed purchases because of the second wave of the pandemic,” says G. Ram Reddy, national vice-president, Credai. “We expect things to get back to normal by the Dasara-Diwali season. But with reports of a third wave, we are keeping our fingers crossed.”
But the Telangana government is not giving up. According to the India Today report, “Such is the urgency that a state-level steering committee headed by chief secretary Somesh Kumar will meet once a fortnight to take stock of the progress of the auctions. There are three distinct committees for lands, approvals and auctions to quicken the process.”
The KCR government’s freebie spree would soon lead the state government towards bankruptcy and then the state government will come to the Union government, asking for money to repay its debts.