Hyderabad: Telangana Deputy Chief Minister Bhatti Vikramarka Mallu urged the Centre to protect state revenues under proposed GST reforms, warning that welfare and development could suffer without a compensation mechanism.
He made the appeal during a GST Council Group of Ministers (GoM) meeting on tax slab rationalisation held in New Delhi on Thursday. The GoM is reviewing GST rates with the aim of simplifying the structure.
Bhatti Vikramarka recalled that when GST was introduced, states were promised 14% annual revenue growth. Compensation was paid for five years to offset losses. He pointed out that current growth stands at only 8–9%, far below the assured rate.
He said rate rationalisation is welcome, but insisted on safeguards. “If revenues fall, essential welfare programmes and infrastructure investments will take a hit,” he said.
Telangana seeks compensation mechanism to bridge the shortfall. The Deputy Chief Minister suggested that the existing cess be retained with full transfer to states. If that is not feasible, taxes on sin and luxury goods should be adjusted to raise extra funds.
He also flagged concerns about the devolution formula. Southern states like Telangana, Tamil Nadu, and Karnataka contribute more to national revenue but receive less in return, he said. Any reform must account for this imbalance, he added.
Attended the GST Council’s GoM meeting in New Delhi chaired by Hon’ble Union Finance Minister Smt. @nsitharaman Ji.
Welcomed the proposal to exempt Life and Health Insurance from GST, which will enhance insurance penetration.
Also welcomed the removal of the 12% slab and… pic.twitter.com/IQxcdKkeBQ— Bhatti Vikramarka Mallu (@Bhatti_Mallu) August 20, 2025
