Telangana borrowings exceed revenue in April as fiscal deficit touches Rs 11,413 crore

Telangana’s borrowings exceeded revenue receipts in April, with the State raising Rs 11,413 crore against Rs 10,974 crore in income, according to CAG data. The State posted a fiscal deficit matching its borrowings, highlighting mounting pressure on public finances.

Hyderabad: In a clear indication of the precarious condition of the Telangana treasury, the borrowings of the Congress government have exceeded the revenue collections in April. The State government raised Rs 11,413.93 crore through market borrowings during April, even as total revenue receipts stood at Rs 10,974.73 crore including tax revenue, non-tax revenue and the Central grants.

In other words, the government borrowed nearly Rs 108 for every Rs 100 earned through taxes.

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The State’s dependence on debt becomes more striking when compared with the State’s tax revenue which was Rs 10,598.33 crore, nearly Rs 816 crore lower than the borrowings raised in a single month. The State realised Rs 3,155 crore from GST, Rs 1,413 crore from Stamps and Registrations, Rs 2,923 crore from Sales Tax, Rs 1,445 crore from State excise duties and another Rs 1,260 crore from State’s share in Central taxes.

Surprisingly, the State’s tax revenue was lesser than Rs 10,916.68 crore collected in April last year.

According to the monthly report of Comptroller and Auditor General (CAG), the fiscal indicators also pointed to mounting pressure on the State’s finances. Telangana recorded a revenue deficit of Rs 8,526.59 crore during April, indicating that revenue receipts were insufficient to meet revenue expenditure. The Congress government presented the budget with a revenue surplus of Rs 6,857.76 crore.

The State also posted a fiscal deficit of Rs 11,413.93 crore, equivalent to the entire amount raised through borrowings. This is unprecedented for any State in the first month of the financial year. Borrowings accounted for more than half of the State’s total receipts of Rs 22,392.28 crore in April.

On the expenditure side, the government spent Rs 21,472.31 crore during the month. Revenue expenditure alone stood at Rs 19,501.32 crore, with substantial outgo towards salaries (Rs 4,449.24 crore), pensions (Rs 1,893.11 crore), interest payments (Rs 2,350.90 crore) and subsidies (Rs 4,727.38 crore). The capital expenditure was pegged at Rs 1,970 crore against an annual estimate of Rs 47,267 crore.

The latest CAG report indicated that the State’s debt-funded spending pattern continued into 2026-27, with borrowings outpacing both overall revenue receipts and tax collections in the very first month of the financial year. This is a major cause of concern for the Congress government which is set to launch Phase-2 of Indiramma Illu housing scheme and numerous other initiatives on Tuesday on the occasion of Telangana Formation Day.

Although the first month of a financial year does not always reflect annual trends, the data offers an early indication of the challenges confronting the State’s finances. With borrowings already exceeding both revenue receipts and tax collections in the opening month of FY27, fiscal management is likely to remain a key area of debate in the months ahead. The government’s ability to improve revenue mobilisation, while containing deficits will determine whether Telangana can sustain its spending commitments without becoming increasingly dependent on debt.

Telangana’s fiscal condition in April 2026:

Borrowings – Rs 11,413.93 crore

Revenue Receipts – Rs 10,974.73 crore

Tax Revenue – Rs 10,598.33 crore

Revenue Deficit – Rs 8,526.59 crore

Fiscal Deficit – Rs 11,413.93 crore