Telangana Government Intensifies Criticism of Centre Over Tax Disparities
In a fiery session at the state assembly, the Telangana government launched a sharp attack on the central government, highlighting what it termed a significant imbalance between the state's tax contributions and the funds it receives in return. The debate centered on the Telangana Value Added Tax (TVAT) Mobility Amendment Bill-2026, with excise minister Jupally Krishna Rao leading the charge.
Minister Exposes Stark Tax Contribution Gap
Jupally Krishna Rao presented detailed figures to underscore the disparity. He revealed that between the financial years 2018-19 and 2024-25, Telangana contributed a substantial ₹4.60 lakh crore in taxes and GST to the Union exchequer. In contrast, the state received only ₹1.36 lakh crore as devolution and grants from the Centre. "This widening gap is unsustainable and reflects discriminatory treatment," the minister asserted, emphasizing the need for fair fiscal policies.
Allegations of Bias Against Non-BJP States
The minister did not mince words in criticizing the BJP-led central government, accusing it of favoring BJP-ruled states while treating others, including Telangana, in a "stepmotherly" manner. His remarks came in direct response to BJP members who had demanded a reduction in VAT on petrol and diesel. BJP MLA Payal Shankar argued that lowering fuel taxes was crucial, especially for agricultural purposes, as modern farming heavily relies on tractors.
Comparative Data with Bihar Highlights Discrepancy
To counter the BJP's demands, Jupally cited comparative statistics, pointing out that Bihar contributed ₹93,560 crore in taxes during the same period but received ₹6,25,450 crore in return. "When funds are tight, these figures should be kept in mind by BJP members," he stated, urging a reconsideration of the central allocation mechanisms.
Defending the VAT Amendment Bill
Jupally defended the TVAT Mobility Amendment Bill-2026, explaining that it aims to plug loopholes in fuel taxation and strengthen state revenues. He detailed that the government had identified a major fuel company exploiting a system where tax was imposed only at the first point of sale through internal transactions, leading to significant revenue leakage. To address this, orders were issued in June 2025, and the current amendment seeks to formalize these measures.
Positive Impact on Revenue Collections
The minister highlighted that the amendment has already begun to yield positive results. VAT collections, which previously averaged ₹28 crore, rose to approximately ₹30 crore after the notification. Overall, total collections increased from ₹220 crore to ₹250 crore during the period from July 2025 to February 2026. The amendment is expected to generate an additional ₹47 crore in a single financial year, bolstering the state's fiscal position while ensuring better compliance in fuel sales.
This move underscores Telangana's commitment to improving its financial health amid ongoing tensions with the Centre over tax allocations. The debate reflects broader national issues surrounding federal fiscal relations and state autonomy.
