KCR’s latest ‘master stroke’ to wriggle out of financial woes!

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(MS Shanker)

With the ongoing, no-holds-barred war between the state and Centre, will the Kalvakuntla Chandrasekhar Rao-headed TRS government’s proposal to reclaim defunct Public Sector Units (PSUs) land parcels provide any relief?

In reality, the amount thus realised will not suffice to cover much ground in a state like Telangana which has a huge debt burden. Added to this unhealthy financial situation, KCR has launched schemes like Dalit Bandhu and Girijan Bandhu which do not help in any way to ease the fiscal situation of the state.

The state government proposes to reclaim 72,000 acres of land in the past allotted to as many as 6 PSUs, which were shut many years ago and may fetch a whopping Rs 40,000 crores if put to public auction.

A desperate KCR seems to have hit upon this idea in consultation with the state chief secretary, Somesh Kumar. On paper it looks viable and sound. Will it run into legal rough weather? That appears to be unlikely because the land in question belongs to the state government and all the PSUs have shut shop a long time ago.

But will this proposal help mitigate the state’s financial woes? KCR’s adversaries as well as political analysts appear to disagree with him on this count.

KCR’s supporters and advisers however, feel that this initiative will help the state tide over the financial crisis to a large extent. They admit that though total state debt today stands around Rs 3.12 lakh crore, this ‘land reclaim from the PSUs as well as another round of ‘regularisation of illegal structures can provide much-needed relief.

Preliminary estimates suggest that the government’s move is likely to fetch around Rs 40,000 crore from reclaimed six PSUs land of 72,000 acres. The building regularization scheme could earn another Rs 1000 crores.

According to a senior TRS leader, the initial estimate of Rs 40,000 crore from 72,000-acre land is under-rated.

As most of these lands are within the GHMC limits, each acre can fetch Rs 1 crore easily and that should help the government overcome its financial crisis at least for now.

“However, the only apprehension is over the possible legal issues,” he admits on condition of anonymity.

Many political analysts and economists wonder how the state can surmount this crisis. The state’s outstanding debt is over Rs 3.12 lakh crore; the initial figures quoted by the government sources of around Rs 41,000 crore will help overcome the crisis to a certain extent.

Analysts argue that already the existing pet schemes of the chief minister like ‘Rythu Bandhu’ and ‘Dalit Bandhu’, besides others need several thousands of crores.

The Dalit Bandhu scheme alone needs Rs 1 lakh crore. As if this burden is not enough, KCR with an eye on the upcoming assembly polls had also announced “Girijana Badhu” which is estimated to cost the state exchequer another Rs 40-50 lakh crore.

The Telangana State after bifurcation has inherited debts of Rs 69,000 crore in 2014. And those borrowings or outstanding liabilities were accumulated over the last 60 years. But, the KCR Government had increased those debts to Rs 3,12,191 crore during the last 7-8 years. Clearly, financial prudence and discipline were two missing elements in the TRS governance model.

According to an RBI report, the total outstanding liabilities of Telangana rose to Rs 72,658.10 crore in 2015, Rs 90,523.4 cr in 2016; Rs 81,820.9 cr in 2017; Rs 160,296.3 cr in 2018; Rs 190,202.7 cr in 2019; Rs 225,418.0 cr in 2020; Rs 267,530.7 cr in 2021 and to Rs 3,12,191.3 cr in 2022.

The former TPCC President Uttam Kumar Reddy alleged that the KCR government mishandled the borrowed funds led to the present chaotic financial situation.

Had the KCR government been more judicious in its spending and utilised the borrowed funds for productive purposes, the debt might not have spiraled. Quoting an observation from the report of the 15th Finance Commission, he said: “The huge investments made in irrigation have not yet resulted in commensurate returns in terms of crop yield improvements.”

Notwithstanding apprehensions of the Opposition, KCR and his supporters consider the new proposals surefire winners to help the TRS ride to power yet again.

“Now, the BJP central leadership has to run for cover as their leader could find lucrative alternatives to fulfill the promises he made and being implemented for the welfare of all sections of the people,” argues another senior TRS leader.

It is unlikely that the outcome of investigations by central agencies would impact the TRS fortunes at the hustings. It is now a game of wait and watch.