Telangana’s Debt Rose 500% Under BRS Govt, Says CAG Data

Hyderabad: The debt-servicing burden of Telangana has grown manifold in the last decade, according to the Comptroller and Auditor General’s (CAG) Publication on State Finances 2022-23. When the state was formed in 2014, annual interest payments stood at Rs 5,227 crore. By 2022-23, this figure had climbed to Rs 21,821 crore, reflecting the impact of heavy borrowings during the previous BRS regime.

The CAG’s report, unveiled in New Delhi recently at the annual conference of State Finance Secretaries, is a comprehensive assessment covering the last 10 years, from 2013-14 to 2022-23. For Telangana, which came into existence in June 2014, the data spans nine fiscal years from 2014-15.

The report noted that in 19 states, salaries were the largest expenditure component in 2022-23, followed by pensions and interest payments. Telangana, however, was one of nine states where interest obligations exceeded pensions, underscoring its rising debt-servicing commitments.

The report revealed that the state’s outstanding debt swelled from Rs 77,333 crore in 2014-15 to Rs 3,09,563 crore in 2022-23, which represents a debt growth of three times or 300 per cent.

This sharp rise was accompanied by growing liabilities through corporations backed by government guarantees, which jumped from Rs 18,265 crore in 2014-15 to Rs 1,98,244 crore by 2022-23 — a growth of nearly 10 times or 985 per cent.

At the aggregate level, combining debt in the books of the state government and corporations, outstanding loans have increased from Rs 95,598 crore in 2014-15 to Rs 5,07,807 crore, representing an increase of five-fold or 500 per cent in debt.

Escalating debt translated into higher interest payments year after year, consuming a growing share of revenue expenditure. From Rs 7,558 crore in 2015-16, the figure climbed steadily to Rs 19,161 crore in 2021-22 and finally touched Rs 21,821 crore in 2022-23.

With salaries and pensions also expanding sharply — employee pay rising from Rs 10,639 crore in 2014-15 to Rs 25,769 crore in 2022-23, and pensions from Rs 4,201 crore to Rs 15,816 crore — the space for capital spending was drastically curtailed.

Telangana, which began its journey as a revenue-surplus state, experienced three years of revenue deficit under the BRS rule. While it registered a surplus of Rs 369 crore in 2014-15, it slipped into a deficit of Rs 6,254 crore in 2019-20, which worsened to Rs 22,298 crore in 2020-21. Although the position improved later, with a surplus of Rs 5,944 crore reported in 2023-24, the volatility highlighted fiscal stress.

The fiscal deficit widened over the years, from Rs 9,410 crore in 2014-15 to Rs 49,038 crore in 2020-21 before moderating to Rs 32,557 crore in 2022-23.