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Cash-strapped Telangana goes slow on incentives to industries


While the Telangana state government is on track when it comes to according industrial approvals within two weeks as promised, it is lagging behind in disbursing incentives to investors on time. The government has promised incentives like stamp duty waiver, power subsidy etc. to attract investments, but investors are being made to continuously approach offices to claim the incentives. An industry is eligible to claim these incentives from the government six months after launching operations or starting production. However, the funds available with the Industries department were sufficient only to clear the previous arrears accumulated over the years in undivided AP, said sources.

The TS government owed Rs 650 crore till September 2014. Though the government sanctioned Rs 650 crore in the budget last year, it could release only Rs 400 crore. The balance arrears of Rs 250 crore have been passed on to this year. The department is now in the process of clearing these balance arrears. Meanwhile, another 2,500 fresh applications claiming incentives have been submitted to the government, which are now lying pending. The industries on the other hand want the department to give priority to both past and present arrears instead of clearing only previous arrears and keeping fresh arrears pending.

“While the government is releasing funds regularly, the problem is coming at the disbursal stage. The department is focused mainly on clearing previous arrears. With this, fresh applications are lying pending. This problem could be overcome if the department spends the funds proportionately on old and new arrears," said Mr V. Anil Reddy, president, the Federation of Telangana and AP Chambers of Commerce and Industry.

Industries minister Jupally Krishna Rao said, “TS inherited arrears of Rs 650 crore from united AP thanks to negligence of earlier Congress governments. Telangan State government had to face the financial burden to clear these dues. Now that those dues are cleared, we will address the fresh applications and clear all the dues soon."

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