Telangana’s Social Spending Rises in Tandem with Revenue Growth

Hyderabad: Telangana’s tax and non-tax revenues have shown steady year-on-year growth, reflecting the state’s improving fiscal situation and expanding economic base, said an RBI report.

According to the latest Reserve Bank of India (RBI) report titled “State Finances: A Study of Budgets”, Telangana has also been increasing its spending on social services in tune with rising revenue, underlining a strong focus on welfare and development-driven growth.

Revenue receipts are projected to rise from Rs.1,69,293 crore in 2023-24 to Rs.2,02,107 crore in 2024-25 and further to Rs.2,29,720 crore in 2025-26, marking a substantial expansion in the State’s resource envelope over three years.

Tax revenue, which forms the backbone of the state’s income, is estimated to grow from Rs.1,35,540 crore in 2023-24 to Rs.1,56,457 crore in 2024-25 and Rs.1,75,313 crore in 2025-26.

Telangana’s own tax revenue is projected to increase from Rs.1,11,798 crore to Rs.1,29,406 crore and to Rs.1,45,419 crore over the same period, reflecting better tax compliance, expanding commercial activity and improved administrative efficiency. The steady growth in own resources is seen as an indicator of fiscal strengthening and reduced dependence on external transfers.

Among major revenue heads, collections from stamps and registration fees are estimated to rise from Rs.14,295 crore in 2023-24 to Rs.19,087 crore in 2025-26, pointing to sustained activity in the real estate and property registration sectors.

Taxes on vehicles are projected to increase from Rs.7,094 crore to Rs.8,535 crore, indicating growth in automobile sales and transport-related economic activity.

State sales tax and VAT collections are expected to move up from Rs.29,989 crore to Rs.37,463 crore, while State Goods and Services Tax receipts are estimated to climb from Rs.39,295 crore in 2023-24 to ₹51,000 crore in 2025-26, highlighting a broad-based expansion in consumption and trade. State excise revenue is also projected to rise from Rs.20,298 crore to Rs.27,623 crore, remaining a major contributor to the state’s own tax resources.

The state’s share in Central taxes is estimated to grow from Rs.23,742 crore in 2023-24 to Rs.29,899 crore in 2025-26, reinforcing the importance of devolution from the Centre. Within this, income tax devolution is projected to increase to Rs.11,140 crore, CGST to Rs.8,704 crore and corporation tax to Rs.8,349 crore by 2025-26, indicating overall buoyancy in national tax collections and their spillover benefits to the State.

On the expenditure side, Telangana’s revenue expenditure is projected to rise from Rs.1,68,514 crore in 2023-24 to Rs.2,26,982 crore in 2025-26. Development expenditure, which supports growth-oriented sectors, is expected to increase significantly from Rs.1,12,868 crore to Rs.1,78,688 crore, while non-development expenditure is projected to remain relatively contained, moving from Rs.55,645 crore to Rs.48,283 crore over the same period, reflecting an attempt to prioritise development programmes.

The social sector spending shows notable growth, with education expenditure rising from Rs.19,184 crore to Rs.22,580 crore and medical and public health allocations increasing from Rs.6,051 crore to Rs.8,291 crore. Urban development spending is projected to witness a sharp jump from Rs.3,366 crore to Rs.12,731 crore, highlighting the emphasis on infrastructure, housing and civic amenities.

Social security and welfare expenditure is also expected to grow from Rs.13,250 crore to Rs.18,925 crore, reaffirming the state’s commitment to inclusive development and support for vulnerable sections.