CAG raises concern over fiscal stress, gaps between budget claims and outcomes in Telangana
The CAG report flagged serious concerns over Telangana’s fiscal management, highlighting gaps between budget estimates and actual spending, rising debt, declining revenues and underutilisation of funds, raising questions over financial discipline and economic sustainability under the current government
Hyderabad: The Comptroller and Auditor General (CAG) raised serious concerns over Telangana’s fiscal management, pointing to widening gaps between budget estimates and actual outcomes, rising debt levels, declining revenues and underutilisation of funds across key sectors.
Citing the latest reports for the year 2024-25, which were tabled in the Assembly on Monday, BRSLP deputy leader and former Finance Minister T Harish Rao said the findings lay bare the gap between projections and implementation and indicate a deterioration in fiscal discipline under the Congress rule. He stated that the findings point to systemic inefficiencies, weak fiscal controls and a growing mismatch between policy intent and execution.
He stated that the CAG report exposed the hollowness of the Congress government’s claims of presenting a realistic budget. He slammed the government for ignoring the warnings of the BRS, adding that the CAG report should serve as an eye-opener for the Congress to restore fiscal discipline.
Budget vs Actuals
The CAG recorded that, against a budget estimate of Rs 2,21,242 crore for 2024-25, actual expenditure stood at Rs 1,67,804 crore, which is just 76 per cent. Revenue expenditure too fell short, with Rs 1,77,224 crore spent against a projection of Rs 2,20,945 crore (80 per cent).
Revenue Deficit Spike
The report highlighted a sharp reversal in the State’s fiscal position, with a revenue deficit of Rs 9,420 crore in 2024-25. This marks a steep shift from a revenue surplus of Rs 779 crore in 2023-24 during the BRS rule, raising concerns over sustainability.
Excess and Unplanned Spending
Across seven heads and two appropriations, additional expenditure of Rs 31,229 crore was incurred beyond budget provisions. In the revenue segment alone, spending overshot estimates by Rs 10,525 crore, which is 21 per cent higher than budgeted, indicating weak expenditure control mechanisms and poor financial discipline.
Debt and FRBM breach
The State breached its Fiscal Responsibility and Budget Management (FRBM) target, with the debt-to-GSDP ratio rising to 34.29 per cent against the prescribed 32.80 per cent. Total outstanding debt touched Rs 5,62,662 crore. Annual borrowings increased sharply from Rs 38,334 crore in 2023-24 to Rs 56,209 crore in 2024-25.
Poor Asset Creation
Of the borrowings, only Rs 36,072 crore was channelled into capital expenditure, pointing to limited asset creation. The CAG noted that debt accumulation was not translating into productive infrastructure or long-term economic gains.
Decline in Revenues
Despite an increase in the State’s share of central taxes from Rs 23,742 crore to Rs 27,050 crore, overall revenue receipts declined from Rs 1,11,798 crore to Rs 1,09,233 crore. The State Own Tax Revenue (SOTR) streams weakened, including stamps and registration (Rs 14,296 crore to Rs 8,473 crore) and vehicle taxes (Rs 7,095 crore to Rs 6,992 crore).
Growth Miss
The State’s GSDP growth was pegged at 9 per cent, falling short of the 10.6 per cent projected in the budget, indicating economic growth was slower than anticipated.
Underutilisation of Allocations
The CAG observed that significant funds remained unspent, including Rs 4,054 crore earmarked for major irrigation projects such as Palamuru-Rangareddy and Kaleshwaram Lift Irrigation Schemes, Rs 1,386 crore for urban drinking water and sanitation schemes, and Rs 1,201 crore under the Constituency Development Fund (CDF).
Social sector gaps
Welfare spending also lagged, with only Rs 9,721 crore utilised out of an allocation of Rs 25,971 crore, just 37 per cent, raising concerns over delivery in social justice sectors.
