Hyderabad: Telangana deputy chief minister and finance minister Mallu Bhatti Vikramarka has raised strong objections over the state’s mounting losses under the Goods and Services Tax (GST) regime.

According to him, if the previous VAT system had continued, Telangana’s revenue in 2024-25 would have been ₹69,373 crore. Under GST, however, the state earned only ₹42,443 crore, a shortfall of nearly ₹27,000 crore in just one year. Since GST’s implementation, Telangana’s cumulative loss stands at around ₹83,000 crore.

Bhatti warned that the Centre’s proposed GST slab rationalisation, expected to be discussed at the September 3 GST Council meeting, may further slash Telangana’s income by another ₹7,000 crore. He demanded that the Union government provide a comprehensive and reliable compensation mechanism for at least five years, using 2024-25 as the baseline year.

The demand was echoed at a recent meeting of finance ministers from eight states — Karnataka, Tamil Nadu, Kerala, Punjab, Jharkhand, Himachal Pradesh, West Bengal, and Telangana — held at Karnataka Bhavan, New Delhi. Karnataka revenue minister Krishna Byregowda chaired the discussions.

The ministers highlighted that during GST’s rollout, the Centre had promised states a 14% annual growth in revenues, with compensation to cover shortfalls. In reality, growth has averaged only 7–8%, straining state finances and welfare programs.

To bridge the gap, the ministers proposed imposing additional taxes on sin and luxury goods, with the proceeds routed to the states. If that proves insufficient, states should be allowed to borrow against future revenues to cover the deficits.

Bhatti reiterated that ignoring state revenue concerns would directly harm welfare and development programs aimed at the poor and middle classes. “The compensatory framework must be fair and robust — otherwise, the states’ ability to serve their people will be severely compromised,” he said.