CAG report flags robust revenue growth but highlights widening revenue deficit and rising liabilities
Hyderabad: The Congress-led government in Telangana has shown a decent performance in managing state finances, according to a preliminary report by the Comptroller and Auditor General (CAG) of India for 2024–25.
Telangana’s total tax receipts stood at Rs 1,67,804.32 crore, amounting to 75.85 per cent of the budget estimate (BE) of Rs 2,21,242.23 crore. The bulk of these receipts of Rs 1,36,283.47 crore came from tax revenue, which achieved 82.90 per cent of the targeted Rs 1,64,397.64 crore. However, non-tax revenue lagged slightly, generating Rs 23,607.77 crore, just 67.05 per cent of the estimated Rs 35,208.44 crore.
Compared to the previous fiscal (2023–24), tax revenues grew modestly from Rs 1,35,540.17 crore, while non-tax revenues dipped slightly from Rs 23,819.50 crore. A key highlight was the robust performance in sales tax, which brought in Rs 31,815 crore — 95.12 per cent of the budgeted Rs 33,449 crore. The state also earned Rs Rs 19,149 crore as its share of union taxes, surpassing the projected Rs 18,384 crore.
Goods and Services Tax (GST) collections stood at Rs 50,343 crore, achieving 85.92 per cent of the Rs 58,594 crore target. However, state excise duties and other taxes fell short. Excise duties fetched Rs 18,603 crore (against Rs 25,617 crore estimated), and other taxes yielded Rs 7,896 crore (against a BE of Rs 10,111 crore). Meanwhile, revenue from grants-in-aid and contributions was a weak point, yielding just Rs 7,913 crore — only 36.57 per cent of the projected Rs 21,636 crore.
On the expenditure front, the state's revenue expenditure reached Rs 1,76,586.74 crore — 79.92 per cent of the estimated Rs 2,20,944.81 crore. The government prioritised salaries, pensions and interest payments. Salaries and wages alone cost Rs 42,245 crore, exceeding the budgeted Rs 40,041 crore. Pension payouts soared to Rs 16,950 crore, 145 per cent of the Rs 11,641 crore estimate, while interest payments touched Rs 26,688 crore, a steep 150 per cent of the projected Rs 17,729 crore. The subsidy burden also increased from Rs 9,410.51 crore in 2023-24 to Rs 11,508.94 crore, amounting to 70.86 per cent of BE Rs 16242.42 crore.
Despite increased revenues, the fiscal pressures translated into a revenue deficit of Rs 8,782 crore, in stark contrast to the budgeted revenue surplus of Rs 297 crore. Fiscal deficit stood at Rs 48,322 crore, slightly below the BE of Rs 49,255 crore. The primary deficit also improved, totaling Rs 21,633 crore, significantly lower than the expected Rs 31,525 crore.
The total expenditure, combining both revenue and capital outlays, amounted to Rs 2,12,796.27 crore amounting to 83.64 per cent of the Rs 2,54,431.31 crore projected for the year. While Telangana’s revenue performance, particularly in tax collections, showed resilience, the rise in pension and interest payments, subsidy burden, remains a concern.
