Revenue crunch: Telangana Congress government turns to asset monetisation for welfare funding

To fund its Rs 33,600-crore welfare schemes, the Telangana Congress government is focusing on boosting non-tax revenue and securing Central grants. With low revenue mobilisation in April, it plans land auctions, mining reforms, and strategic asset monetisation to raise funds

Hyderabad: Amid mounting fiscal pressure, the Congress government in Telangana is exploring ways to increase non-tax revenue and secure more Central grants to sustain its ambitious welfare outlay of Rs 33,600 crore for the ongoing fiscal year. Apart from Rythu Bharosa, the State is gearing up for full-fledged implementation of the Indiramma Atmeeya Kanuka, Mahalakshmi, and Indiramma Housing schemes ahead of the local body elections.

According to data from April 2025, the State managed to mop up only 6.23 per cent of its projected tax revenue for the 2025-26 financial year, collecting Rs 10,916.68 crore. This was nearly Rs 548 crore less than the Rs 11,464.17 crore mobilised in April 2024. Non-tax revenue figures were even lower, with only Rs 253.60 crore collected in April 2025, as against Rs 353.71 crore during the same period last year.

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However, grants-in-aid from the Centre showed a marginal improvement, with Rs 68.85 crore released this April, compared to nil disbursement last year. This marks the second consecutive financial year where the Congress government’s fiscal performance has lagged behind that of the previous BRS regime. With development and welfare schemes in focus, the State is under pressure to improve both tax and non-tax revenue mobilisation.

Though the government has publicly instructed departments to follow equitable budgetary allocations, sources indicated that instructions were issued to prioritise revenue-generating departments in light of the shortfall.

During the BRS rule, Telangana had bolstered non-tax revenues through large-scale monetisation, including leasing the Outer Ring Road (ORR) for Rs 7,380 crore and land auctions totalling Rs 5,000 crore. Since the Congress came to power, however, such transactions have been few, directly impacting overall revenues.

To bridge the gap, the government is exploring options such as structured leasing and auctioning of public properties and land. It is also considering resuming land auctions under a more regulated framework to avoid market speculation.

Officials have reportedly proposed a new mineral policy to enhance non-tax income from mines and minerals, especially sand mining, which had generated substantial royalties and seigniorage fees under the BRS government. They emphasised the need to address inefficiencies in the auctioning process and close loopholes in sand mining practices.

While rationalisation efforts are ongoing, the lack of comprehensive reform has limited the State’s ability to fully meet revenue targets. Officials have been directed to draw up actionable strategies aimed at maximising non-tax revenue and improving fiscal resilience.

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How the government plans to improve non-tax revenue

• Rationalisation of mine auctions to enhance transparency and competitiveness
• Plugging loopholes in sand mining operations to curb revenue leakages
• Diversification of revenue streams
• Exploring untapped sources of non-tax revenue
• Encouraging private-sector participation in infrastructure projects
• Strategic land monetisation under a more structured approach