Telangana's Revenues Improve But Revenue, Fiscal Deficits Widen
The Budget for 2025-26 had projected revenue receipts at ₹2,29,720.62 crore
Hyderabad: Telangana’s financial performance in the first four months of the current fiscal, from April to July, has revealed widening deficits despite a marginal rise in revenues, according to a report submitted by the state government to the Comptroller and Auditor General of India (CAG). The data up to July shows total receipts, including tax, non-tax revenues and loans, at ₹74,955 crore, while expenditure touched ₹68,823 crore. The loan burden has grown substantially, putting pressure on the state’s fiscal health.
The report highlighted that the revenue deficit had ballooned to ₹12,564 crore by July, sharply deviating from the projected revenue surplus of ₹2,738.33 crore for the year. Similarly, the fiscal deficit reached ₹24,669.88 crore against the annual projection of ₹54,009.74 crore. The rising gap has been attributed to higher spending on loan repayments, welfare programmes, salaries and pensions.
The Budget for 2025-26 had projected revenue receipts at ₹2,29,720.62 crore. By the end of July, the state managed to mobilise ₹50,270.25 crore, accounting for 21.88 per cent of the budget estimate (BE), slightly higher than 21.57 per cent in the same period last year. Tax revenues contributed the bulk, with ₹48,145.57 crore realised against the projected ₹1,75,319.35 crore, covering 27.46 per cent of BE, again a marginal improvement over last year’s 27.11 per cent.
Among major tax components, Goods and Services Tax (GST) collections reached ₹16,882.08 crore, 28.28 per cent of the annual target of ₹59,704.59 crore. Stamps and registration brought in ₹5,067.45 crore (26.55 per cent), while sales tax (VAT) yielded ₹11,368.79 crore (30.35 per cent). State excise duties contributed ₹6,347.22 crore (22.98 per cent), while the state’s share of Central taxes added `5,899.18 crore (32.09 per cent). Other taxes and duties fetched ₹2,580.49 crore (19.78 per cent of the Budget target).
Non-tax revenue remained a weak spot, with the state generating only ₹1,334.21 crore, 4.22 per cent of the targeted ₹31,618.77 crore, though marginally higher than last year’s 3.57 per cent. Central grants were particularly low, with just ₹790.47 crore realised, accounting for 3.47 per cent of the projected ₹22,782.50 crore.
On the capital receipts front, the state mobilised ₹24,685.49 crore, covering 44.79 per cent of the ₹55,116.67 crore target. Notably, loans and other liabilities formed almost the entire component at ₹24,669.88 crore, which is 45.68 per cent of the budgeted ₹54,009.74 crore.
On the expenditure side, revenue spending touched ₹62,835.02 crore (27.68 per cent of BE of ₹2,26,982.29 crore), a slight rise over 26.72 per cent recorded last year. Interest payments amounted to ₹9,355.37 crore, nearly half the yearly provision, while salaries accounted for ₹15,961.64 crore and pensions ₹6,149.96 crore. Subsidy expenditure stood at ₹7,191.38 crore, already 44 per cent of the year’s outlay. Capital expenditure was relatively low at ₹5,988.27 crore, forming 16.40 per cent of the ₹36,504.45 crore Budget.
