CAG report shows Telangana is facing rising fiscal deficit and financial stress

Telangana’s government accounts for 2025 reveal mounting financial stress, with the fiscal deficit reaching Rs 45,139 crore by September, already 83.58 per cent of the annual target. Revenue collections stood at Rs 76,940 crore, far below projections, while expenditure touched Rs 89,394 crore, driven by salaries, pensions and subsidies.

Hyderabad: Telangana’s government accounts for 2025 show growing financial pressure. The State’s fiscal deficit (the gap between what it earns and what it spends) stands at Rs 45,139 crore as of September 2025. This means the government is borrowing heavily to meet its expenses.

Interestingly, the total fiscal deficit for 2025-26 financial year was pegged at Rs 54,009.74 crore, while by this September figure stands at Rs 45,139.12 crore, meaning that the Congress government had utilised nearly 83.58 per cent of the projected figure by the end of half of the financial year.

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The figures issued by the Comptroller and Auditor General in September show that Telangana government had collected Rs 76,940 crore in revenue so far. This is only about a third of what was planned. Most of the money comes from taxes. Income from other sources, like grants or fees, was much lower than expected.

Spending by the government was high. It spent Rs 89,394 crore on regular costs, such as salaries, pensions and subsidies. These costs were rising quickly and took up a large part of the budget.

Interestingly, the capital expenditure was already 60 per cent of the full-year target. The capital expenditure so far stands at Rs 22,209.20 crore, as against Rs 36,504.45 crore (full year).

Since the income was lagging behind, Telangana had borrowed Rs 45,139.12 crore (by September) which is already 83.58 per cent of the borrowing (Rs 54,009.74 crore) planned for the year. Most of the money borrowed is used for normal expenses, not just for new projects. This, political observers say, could lead to problems repayment of debts in the future.

These deficits were clear signs of financial stress. A revenue deficit of Rs 12,452.89 crore shows that even day-to-day government expenses were not being met with regular income. Incidentally, the budget estimates for 2025-26 projected a revenue surplus of Rs 2,738.33 crore.

That means the State had run into a Revenue deficit by the end of the half yearly period of the financial year. Also, the overall deficit means the State is living beyond its means and depending on loans.

For the common man these numbers mean the government is spending more than it earns. Salaries, pensions, and subsidies are adding to costs.

With fewer grants and other income, borrowing was rising, creating bigger debt. And if this pattern continued, Telangana would be left with Hobson’s choice – either cut down on spending or raise taxes. If these options were not considered, it would have to borrow even more.