CAG Flags Huge Gap in Telangana's Tax Receipts

Hyderabad: The Comptroller and Auditor General of India (CAG) has reported that the state government has achieved only 72.87 per cent of its projected tax receipts for 2025-26 by the end of January, raising concerns about its ability to meet annual targets with just two months remaining in the fiscal which ends on March 31.

According to the CAG’s ‘State Accounts at a Glance’ report released on Monday, Telangana recorded a revenue deficit of ₹10,566 crore, against the budgeted surplus of ₹2,738 crore. The fiscal deficit stood at ₹69,148 crore, while the primary deficit reached ₹45,063 crore, exceeding the estimate of ₹34,640 crore by over ₹10,000 crore.

The report states that receipts stood at ₹2.07 lakh crore, short of the Budget estimate of ₹2.84 lakh crore. Of this, tax revenue amounted to ₹1.26 lakh crore, representing 72.04 per cent of the projected ₹1.75 lakh crore. Capital receipts were bolstered mainly by borrowings and other liabilities, which touched ₹69,187 crore, amounting to 125.53 per cent of the ₹54,009 crore budget estimate, indicating increased reliance on debt to bridge resource gaps.

Goods and Services Tax collections reached ₹43,673 crore, achieving 73.15 per cent of the ₹59,704 crore estimate. Sales tax collections stood at ₹27,911 crore against the budgeted ₹37,463 crore, while state excise duties fetched ₹19,083 crore, or 69.09 per cent of the ₹27,623 crore target. Excise revenue growth remained modest despite the government increasing the licence fee for retail liquor outlets from ₹2 lakh to ₹3 lakh.

The state’s share of Union taxes performed relatively better at ₹16,496 crore, 77.83 per cent of the ₹21,195 crore estimate. Non-tax revenue remained sluggish at ₹7,864 crore, just 24.87 per cent of the ₹31,618 crore projected. Grants-in-aid and contributions were also low at ₹4,213 crore, 18.49 per cent of the ₹22,782 crore budgeted.

On the expenditure side, interest payments exceeded the Budget provision, reaching ₹24,085 crore compared to the estimated ₹19,369 crore. The interest burden is expected to touch around ₹30,000 crore by the end of the fiscal. Pension payments also overshot projections, rising to ₹15,717 crore against the ₹13,109 crore estimate. Salaries and wages amounted to ₹39,858 crore, accounting for 89.61 per cent of the ₹44,478 crore allocated for the year.