Telangana gears up for Rs 3.2 lakh crore budget amid fiscal crisis

A special session of the State Assembly is likely to be held in the first week of March to pass key bills related to BC reservations and SC categorization. Meanwhile, the budget session is expected to commence in the third week of March after the Governor's address. The government plans to conclude the session before March 28, considering Ramzan, Ugadi, and other festivals at the end of the month.

Hyderabad: The Telangana government is expected to present the State budget with an outlay of Rs 3.15 lakh crore-Rs.3.2 lakh crore for the 2025-26 financial year, marking the highest allocation in the State’s history. This is a significant increase from last year’s Rs 2.91 lakh crore budget.

While a special session of the State Assembly is expected to be held in the first week of March for passing crucial bills pertaining to the BC reservations and SC categorisation, the budget session is expected to begin in the third week of March, following the Governor’s address. The government aims to conclude the session before March 28, keeping in view of Ramzan, Ugadi and other festivals at the month’s end.

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Finance Minister Mallu Bhatti Vikramarka has been conducting department-wise reviews, gathering expenditure estimates and scheme implementation details. Unlike last year, when the government presented a vote-on-account budget due to Lok Sabha polls and later a full budget, a comprehensive budget will be introduced this year.

Official sources said the budget will focus on welfare schemes and development programmes, with special focus on the electoral promises of the Congress which could not be delivered in its first year of administration. Except for the free bus service for women and partial implementation of promises like enhanced Rythu Bharosa, crop loan waiver, LPG subsidy and free power upto 200 units for women among others, none of the welfare schemes have seen the light in the last 15 months of the Congress rule.

Numerous schemes like monthly honorarium to women, financial assistance to unemployed, enhanced social security pensions, Indiramma housing and others have remained non-starters, which are likely to get priority in the latest budget. According to sources, agriculture, irrigation, infrastructure and welfare are likely to be focus areas.

However, given the stagnant revenue flow and rising debt, the Congress government faces an uphill battle in balancing its ambitious spending plans with the stark reality of its dwindling finances. The massive budget proposal comes at a time when the State is battling severe financial mismanagement, mounting revenue deficits, and sluggish tax collections.

Telangana’s revenue receipts currently stand at Rs 1,23,815 crore – just 55.96 per cent of the budget estimate of Rs 2,21,242 crore. This is a sharp decline from 63.2 per cent last year.

In terms of State Own Tax Revenue (SOTR), the State realised 68.6 per cent of its annual target till January this year, compared to 72.42 per cent last year. The State also recorded a massive revenue deficit of Rs 26,050 crore against revenue surplus budget of Rs 292 crore.