Congress govt’s borrowing surges to alarming levels of Rs 2.88 lakh crore

Telangana’s debt has escalated sharply under the Congress government, crossing Rs 7.48 lakh crore in just over two years. Of this, Rs 1.45 lakh crore was raised in the current fiscal alone, with both FRBM and off-budget loans contributing to the surge.

Hyderabad: In just over two years, Telangana’s debt trajectory has entered a zone of serious fiscal concern. The Congress government has already piled up debt worth Rs 2.88 lakh crore, which is expected to hit Rs 3 lakh crore by the end of the current financial year.

Of this, a staggering Rs 1.45 lakh crore was raised in the current fiscal alone through a mix of market borrowings and off-budget or non-FRBM loans.

The scale and pace of borrowing since December 2023 marks a sharp departure from earlier trends. According to data placed before Parliament by the Union government, total public debt stood at Rs 3.5 lakh crore at the end of 2023-24, comprising open market borrowings, loans from the Centre, autonomous bodies and special securities issued to the National Small Savings Fund (NSSF).

According to a white paper tabled by the Congress government, the non-FRBM loans which were raised by various corporations, stood at Rs 1.1 lakh crore. Together, both the FRBM and non-FRBM loans accounted for around Rs 4.6 lakh crore.

This included nearly Rs 35,000 crore borrowed by the Congress government between December 2023 and March 2024, besides around Rs 72,000 crore debt inherited from the erstwhile Andhra Pradesh at the time of State formation in 2014.

The debt slide accelerated further in 2024-25. As per the Union Finance Ministry in the Lok Sabha this year, the outstanding liabilities of the State climbed to Rs 4.42 lakh crore, including around Rs 68,000 crore raised in the corresponding fiscal under FRBM limits.

During the current fiscal, market borrowings rose by another Rs 66,000 crore as on December 2, pushing total public debt under FRBM limits to Rs 5.08 lakh crore.

The off-budget loans or non-FRBM loans also rose to nearly Rs 2.4 lakh crore as on December 2 this year. This includes Rs 10,000 crore loan against Kancha Gachibowli lands, another Rs 12,000 crore by various urban local bodies, and HUDCO loans of around Rs 5,000 crore. At present, the total liabilities of the State stand at a staggering Rs 7.48 lakh crore.

Even after accounting for repayments including interest made over the last two years, official estimates pegged Telangana’s total outstanding liabilities at around Rs 6.8 lakh crore.

Adding to the fiscal stress, the Centre has granted Telangana a fresh borrowing consent of Rs 71,400 crore for 2025-26, significantly higher than the Rs 54,009 crore allowed in the current year under FRBM norms.

To facilitate this enhanced borrowing, the Union government also permitted rescheduling and restructuring of existing loans, which is considered an extraordinary concession.

Economists warn that the borrowing spree has not been matched by a commensurate expansion in productive capital expenditure or revenue-generating assets, raising fears of shrinking fiscal space and long-term growth constraints.

In comparison, excluding inherited debt and the loans raised in 2023–24, the previous BRS government borrowed about Rs 2.8 lakh crore through open market borrowings and Rs 1.1 lakh crore via non-FRBM channels over nearly a decade, a scale now surpassed by the Congress regime in just over two years.