The following article was written for OpIndia. Pasting it here for reference:
One of the narratives around the South-North divide is that the South states contribute more money to the central government and are therefore much more superior than the Northern states. Leading this pack is none other than KCR’s son, KTR. He is also a cabinet minister in his father’s cabinet (duh!) and many consider him the de-facto Chief Minister.
He claims that while Telangana paid 3.68 lakh crores to the central government, it only got back 1.68 lakh crores in return. He has been making this argument since the year 2020 (at that time the numbers were obviously lesser). He went to the extent of calling everyone who countered this fallacious argument “ignoramuses”.
At various public meetings, he challenged the BJP to prove him wrong and he will resign. He successfully made it sound like the Government of Telangana actually gave the Government of India the 3.68 lakh crores and got only 1.68 lakh crores in return. The fallacious narrative was repeated so many times in the past 3 years that people and the media started believing in it. This dangerous, divisive and fallacious argument went un-countered for nearly 3 years.
On June 17th, 2023, Union Minister Kishan Reddy (who is an MP from Secunderabad, Telangana) gave a nearly 3-hour long presentation to the people of Telangana. In a detailed 321 (yes, Three Hundred and Twenty-One) slide presentation, he explained along with proofs, how the central government and associated PSUs actually spent close to a whopping 27 lakh crores on various aspects related to Telangana.
Outside of the 1.78 lakh crores of actual money that was transferred to the Telangana government as part of the devolution pool, a whopping 5 lakh crores has been spent by the central government on various infrastructure and other developmental works; 1.58 lakh crores was spent on procuring Cotton & Paddy at MSP; 7.5 lakh crores worth of loans by PSUs to the Telangana government and so on.
The intention of this article is not to dwell on details of the above graphic; nor is it to ask KTR to resign because he has been proven wrong, and how! The intention is to discuss the phenomenal finance management of the Modi government over the past 9 years that enabled so much spending on infrastructure; and the dangerously divisive and fallacious argument that non-BJP parties are making in the South.
In one of the slides, we are shown that there has been a whopping 376% in the actual amount that has devolved to the states from 2014 onwards, as compared to 2004-2014 (and that Telangana has seen an increase of nearly 253% increase in the absolute amount.
By any standard, these are really phenomenal numbers that we have achieved. This is after the fact that Income Tax slab rates have actually reduced the amount of tax we pay; the GST on 100s of items is much lesser than the pre-GST days; Corporate tax is also lesser compared to earlier etc. This fiscal prudence has been achieved by increasing compliance – a feat that remains one of the most underrated achievements of the Modi government.
In addition to devolving the actual cash of 41% to the states, it is yet another phenomenal achievement of how the remaining 59% was spent by the Modi government. Yet again, another snippet from this brilliant Kishan Reddy’s presentation gave, we see how the infrastructure spending has been phenomenal. Let’s just take the Roads as an example:
The above graphic tells us that a whopping 1.08 lakh crore was spent on roads alone in just one state (that by the way doesn’t get accounted for the 1.78 lakh crore devolved to the government of Telangana). Similar statistics on Railways, Electricity, Civil Aviation etc are available and all prove the excellent meaningful spending on India’s infrastructure at a scale that was never seen before.
This brings me to the second and the more important point I wanted to make – the dangerous, divisive and fallacious arguments that KTR (and his ilk) are making to create a rift between Indians. The argument is that South India pays more money to the central government and therefore is superior to North India.
The argument is dangerous because they intend to showcase South India as the only torchbearer of India’s economy and therefore everyone else should be subservient to them. By making it only about money, they want us to ignore manpower availability; infrastructure spending; defence spending; rescue spending; relief spending etc
The argument is divisive because it pits Indians against Indians in an Inferior vs Superior battle. True, today’s Bihar and UP don’t contribute as much money as Telangana does (as a %age population contribution) but then we have 10s of 1000s of workers from UP and Bihar working in Telangana, building infrastructure in Telangana. Would Telangana be able to construct so much infrastructure if not for the availability of manpower from other states?
The argument is fallacious because it is simply bereft of logic and common sense. It is a fair argument to make that states that do better on population control and tax collections should be rewarded. Guess what? Modi government is the first government to have rewarded states that perform well on population control and tax efforts. This has also created a healthy competition between states to do well on these parameters too.
The central government collects income tax from the people of India, and so to make it sound like it is the Government of Telangana that gave 3.68 lakh crores to the central government is insincere to the core. This argument can simply be extended to KTR’s own ministries – for example – how much taxes are people of Hyderabad paying and how much of that is being spent on Hyderabad? The argument can be extended to even asking how much taxes people of a rich street pay versus how much is being spent by the government on that sheet. We had countered a similar argument the many opposition parties often made on the money released by the central government during natural disasters and did not bother about the huge logistical support that the central government provides (Armed forces, tonnes of relief material, trains etc).
The Modi government is now releasing this data for all states one by one. It shows how infrastructure spending and the availability of loans to various sections of society are as uniform as it can possibly get. We all still remember the days when Railway ministers used to stand up in the Parliament, present India’s Railway budget but include a slew of trains exclusively for their home states! In a very short time, we have come a long way from travesties such as that. If anything, Kishan Reddy’s amazing 3-hour long presentation proves that the Modi government’s uniform approach towards developing entire India is something to be extremely proud of.
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