Telangana revenue buoyancy declining as central transfers fell from 23.5% to 15.1%
GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Mains·
Why in news
The Centre for Economic and Social Studies (CESS) released a report highlighting a decline in Telangana's revenue buoyancy due to a significant drop in central transfers.
Background
The CESS report 'Public Finances of Telangana: Trends, challenges and policy priorities' notes that central transfers to the state fell from 23.5% in 2015-16 to 15.1% in 2024-25. Director E. Revathi recommended widening the revenue base and increasing education expenditure.
Facts for Prelims
- FactCentral transfers to Telangana fell from 23.5% in 2015-16 to 15.1% in 2024-25
- BodyCentre for Economic and Social Studies (CESS) is the body that released the report
- PostE. Revathi is the Director of CESS
For Mains
Q. Discuss the fiscal implications of declining central transfers on state-level revenue buoyancy and the necessity of broadening state-specific revenue bases.
Dimensions to cover in your answer
- Fiscal autonomy: Balancing state-level expenditure requirements with diminishing vertical fiscal imbalance
- Revenue diversification: Transitioning from transfer-dependent models to robust internal tax-base expansion
- Human capital investment: Ensuring education expenditure remains resilient despite shrinking fiscal space
Keywords: Revenue buoyancy · Fiscal federalism · Vertical fiscal imbalance · Revenue base expansion · Public finance
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