Telangana borrows double the planned amount in Q2, outstanding debt nears Rs 2.3 lakh crore

Telangana’s Congress government has borrowed double its planned Q2 target, pushing total debt close to Rs 2.3 lakh crore. Experts warn that aggressive borrowing, off-budget loans, and repayment pressures threaten welfare, salaries, and development priorities

Hyderabad: In just two-and-a-half months of the second quarter between July and September of the current fiscal, the Congress government in Telangana has borrowed double the indicated amount, that too amidst a deepening fiscal crisis. The State government had proposed to raise Rs 12,000 crore through auction of government securities for the July-September quarter, but by September 16, borrowings have already touched Rs 24,000 crore.

With this, Telangana’s outstanding debt has reached nearly Rs 2.3 lakh crore under the Congress regime in less than 22 months after the party assumed power in December 2023.

---

For the 2025–26 fiscal, Telangana budgeted Rs 64,539 crore under the FRBM limit, including Rs 54,009 crore through government securities. Yet, as of mid-September, the State has already borrowed Rs 41,400 crore, nearly 77 per cent of the annual target within the first half of the year. With the government planning to raise another Rs 3,000 crore over the remaining two weeks, the government will be left with less than Rs 10,000 crore or 20 per cent of its annual borrowing limit for rest of the financial year.

The Congress government in the State had already submitted representations to the Centre to approve non-FRBM loans amounting to nearly Rs 40,000 crore including Rs 30,000 crore for Young Indian Integrated Schools, there has been no response. Requests to increase the FRBM loans also did not receive any response from the Centre. Even if approved, experts warn that it would only worsen the prevailing situation.

Between December 2023 and March 2025 alone, the government raised Rs 1.66 lakh crore in market loans. In addition, another Rs 26,000 crore-Rs 28,000 crore was mobilised through Central government loans, autonomous institutions and off-budget borrowings via corporations and special purpose vehicles (SPVs).

For the current year, provisions include Rs 23,719 crore in Central loans, Rs 11,202 crore from autonomous bodies, and Rs 21,787 crore through provident funds and special securities. Critics pointed out that the ballooning off-budget borrowings, coupled with aggressive securities auctions, have put the State on a perilous fiscal path. Repayment pressure is rising, leaving little fiscal space for welfare, salaries or capital investment.

With contractors protesting pending bills, employees awaiting salaries, and welfare arrears piling up, the government’s mounting debt burden is becoming a political flashpoint. Analysts warned that the unsustainable pace of borrowing not only threatens development priorities but also risks pushing Telangana into a cycle of debt servicing over productive spending.