CAG Report: Telangana's Revenue Deficit Dips While Fiscal Deficit Rises in August

Hyderabad: Telangana’s fiscal position has shown a mixed trend by the end of August 2025 in current fiscal 2025-26, with the revenue deficit narrowing compared to the previous month but the fiscal deficit widening further, according to the Comptroller and Auditor General (CAG) report released on Tuesday.

The report pegged the state’s revenue deficit at Rs.11,051.95 crore in August 2025, against a projected revenue surplus of Rs.2,738.33 crore in the Budget Estimates (BE) for 2025-26. While the revenue gap remains significant, it is lower than the Rs.12,564.77 crore deficit reported in July 2025, reflecting a slight improvement in revenue flows.

However, fiscal deficit trends remain a concern. The CAG recorded the state’s fiscal deficit at Rs.33,415.15 crore in August 2025, up from Rs.24,699.88 crore in July 2025. The BE for 2025-26 had projected a fiscal deficit of Rs.54,009.74 crore, meaning that within five months, Telangana has already crossed more than 61 per cent of the annual target.

The state’s total receipts till August 2025 stood at Rs.96,654.25 crore, accounting for 33.93 per cent of the budgeted Rs.2,84,837.29 crore for the fiscal year. A major share of these receipts came from borrowings, with loans contributing Rs.33,415.15 crore, or 61.87 per cent of the BE of Rs.54,009.74 crore. This high reliance on borrowings has underlined the government’s growing dependence on debt to manage its finances.

Revenue receipts amounted to Rs.63,219.46 crore, which is just 27.52 per cent of the budgeted Rs.2,29,720.62 crore. Capital receipts, meanwhile, stood at Rs.33,434.79 crore, making up 60.66 per cent of the budgeted Rs.55,116.67 crore.

Among tax revenues, Goods and Services Tax (GST) collections totaled Rs.21,144.53 crore, or 35.42 per cent of the BE of Rs.59,704.59 crore. Sales tax fetched Rs.14,079.61 crore (37.58 per cent of BE of Rs.37,463.90 crore), while stamps and registrations brought in Rs.6,218.27 crore (32.58 per cent of BE of Rs.19,087.26 crore).

State excise duties contributed Rs.7,758.85 crore (28.09 per cent of BE of Rs.27,623.36 crore), and the state’s share of Union taxes was Rs.7,413.12 crore (40.32 per cent of BE ofRs.18,384.19 crore).

Non-tax revenues were alarmingly low at just Rs.1,578.44 crore, representing only 4.99 per cent of the budgeted Rs.31,618.77 crore. Similarly, the Centre’s grant-in-aid stood at a meager Rs.1,673.43 crore, which is only 7.35 per cent of the estimated Rs.22,782.50 crore.

On the expenditure side, revenue expenditure reached Rs.74,271.41 crore (32.72 per cent of BE of Rs.2,26,982.29 crore). Key components included Rs.20,141.33 crore on salaries (45.28 per cent of BE), Rs.11,447.35 crore on interest payments (59.10 per cent ), Rs.7,701.78 crore on pensions (58.75 per cent ), and Rs.7,492.15 crore on subsidies (45.84 per cent ).

Capital expenditure was reported at Rs.14,339.54 crore, amounting to 39.28 per cent of the BE of Rs.36,504.45 crore. The overall expenditure (revenue and capital) stood at Rs.88,610.95 crore, representing 33.63 per cent of the total budgeted expenditure of `2,63,486.74 crore.

The figures highlight the state’s challenge of balancing development spending with fiscal discipline, as the government’s growing reliance on borrowings risks increasing debt burden in the coming years.