Fiscal federalism is need of the hour: KTR
‘Telangana’s growth model ideal for overcoming economic slowdown’by Special Correspondent
Information Technology Minister K.T. Rama Rao has called for ‘fiscal federalism’ stating that the Centre needs to give States more access to the capital and be liberal when it comes to Fiscal Responsibility and Budget Management (FRBM) limits.
When the Union government talks about ‘Team India’ and ‘cooperative federalism’ it should also practise fiscal federalism and such bold decisions will only help in the dream of making India a five trillion economy, he said.
KTR expressed these views while participating in a discussion with Tech Mahindra CEO CP Gurnani on ‘March to 5 Trillion Economy: Reality or Ambitious’ at the 28th Nasscom Technology and Leadership Forum 2020 in Mumbai on Friday.
Stating that India needs the three ‘I’ mantra - innovation, infrastructure and inclusive growth, he said the country has to do a lot more work when it comes to innovation sector. Think big and spend huge on infrastructure was KTR’s argument while he referred to how Telangana government spent around ₹1.60 lakh crore on capital expenditure during 2014-19.
KTR mentioned Kaleshwaram project and Mission Bhagiratha scheme on which the government had spent huge money in the last six years and said these projects would be huge assets for the State for years to come.
On inclusive growth, he said India’s growth should not be limited to cities; even smaller towns and villages have to be taken care of. He said that while cutting edge and emerging technologies can come up in big cities, the IT industry needs to shift its focus to tier-two cities.
To overcome the economic slowdown the country has been facing in the last two fiscal years, he said the country should look at the Telangana model. If the five trillion economy dream has to be achieved, country needs to grow at 10% and for this there should be more infusion into infrastructure.
During the debate, KTR said, “IT, banking, financial services, tourism, and hospitality are the sectors which can be further augmented with a well-planned strategy and the Government of India needs to focus on these sectors where the States can be allowed to play a larger role in tandem with the Centre.”
To compete with any large manufacturing economy, country needs to leverage its scale. He said Telangana was the only State that has come up with global scale projects like Pharma City and Kakatiya Mega Textile Park but the Centre has not extended any support despite several pleas for building these projects into world-class parks.