Telangana borrowings touch 37.5 per cent of annual Budget target in first quarter

Telangana relied heavily on borrowings during the first quarter of 2026-27, with debt reaching 37.5 per cent of the annual Budget estimate. Revenue collections improved only marginally, while expenditure, interest payments and pensions continued to put pressure on the State's finances.

Hyderabad: Telangana’s finances continued to rely heavily on debt during the first quarter of 2026-27, with borrowings touching nearly 37.5 per cent of the annual Budget estimate by the end of June itself. Revenue receipts registered only a marginal improvement over the corresponding period last year, notwithstanding the State government’s efforts to improve its coffers.

As per the latest report by the Comptroller and Auditor General, the State mobilised Rs 21,919.23 crore through borrowings and other liabilities in the first three months against the annual estimate of Rs 58,458.71 crore, accounting for 37.5 per cent of the full-year target. This was almost identical to the 37.52 per cent recorded during the same period last year.

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In contrast, revenue receipts stood at Rs 42,525.96 crore, or 17.63 per cent of the Budget estimate of Rs 2.41 lakh crore, compared to 16.2 per cent during the corresponding period of the last fiscal. The figures indicate only a marginal improvement in revenue mobilisation, while borrowings continued to fund a substantial part of government expenditure.

Tax revenue remained the principal source of income, contributing Rs 38,447.58 crore, with healthy collections from GST, sales tax and stamp duty. However, the State’s share of Union taxes fell to 15.68 per cent of the annual estimate from 23.85 per cent a year ago. Non-tax revenue and grants-in-aid also remained relatively weak at 7.55 per cent and 5.71 per cent of their respective Budget estimates.

The expenditure pattern reflected continuing fiscal pressure. Revenue expenditure reached Rs 54,815.34 crore, or 23.38 per cent of the annual estimate, while interest payments alone consumed Rs 7,778.19 crore, representing 36.51 per cent of the yearly allocation. Pension expenditure touched nearly half of the annual Budget provision at 49.6 per cent, and subsidy expenditure reached 38.42 per cent.

Capital expenditure remained relatively low at Rs 6,579.44 crore, just 13.92 per cent of the annual target.

The State posted a revenue deficit of Rs 12,289.38 crore during the April-June period, while the fiscal deficit stood at Rs 21,919.24 crore, which is equivalent to the net borrowings undertaken during the quarter.

The latest figures suggest that despite a slight improvement in revenue collections, Telangana’s fiscal position continues to be anchored largely by debt, with borrowings expanding at a much faster pace than its own revenue growth in the opening quarter of the financial year.

Revenue Receipts: Rs 58,458.71 crore

Tax Revenue: Rs 38,447.58 crore

Borrowings: Rs 21,919.23 crore

Fiscal Deficit: Rs 21,919.24 crore