Telangana’s economic miracle falters under Congress rule

From 2014-15 to 2023-24, Telangana showcased remarkable governance and economic progress. Tax revenues soared from ₹37,477 crore to ₹1.35 lakh crore, while the Gross State Domestic Product (GSDP) at current prices climbed to ₹14.64 lakh crore, reflecting an 11.9% growth rate—the third highest in the country. Telangana has consistently ranked among the top three states for GSDP growth over the past three years.

Hyderabad: After nearly a decade of remarkable progress, Telangana’s economic engine has begun to sputter. Once a beacon of economic progress and fiscal prudence, the State now finds itself on a precarious financial slope under the Congress-led government, with alarming trends emerging in just 11 months of A Revanth Reddy’s administration.

From 2014-15 to 2023-24, Telangana stood as a testament to effective governance and economic management. Tax revenues surged from Rs 37,477 crore to an impressive Rs 1.35 lakh crore, while the State’s Gross State Domestic Product (GSDP) at current prices rose to Rs 14.64 lakh crore – an 11.9 per cent increase, marking the third largest increase in the country. Telangana secured a spot among the top three States with highest GSDP growth rate for past three years.

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In 2023-24, the State ranked second in per capita income among large States, with Rs 3.47 lakh, nearly double the national average of Rs 1.83 lakh. Its contribution to the national GDP stood at a robust 4.9 per cent in 2023-24, compared to 4.1 in 2014-15.

However, the tide has turned sharply under the year-long Congress rule. In the current financial year, Telangana has managed to meet only 39.41 per cent of its revenue target, collecting Rs 1.08 lakh crore of the projected Rs 2.74 lakh crore. Tax revenue collections have also faltered, with just 41.91 per cent of the annual target realised.

Debt has ballooned at an alarming rate. In the last 11 months, the Revanth Reddy government has added Rs.77,118 crore to the State’s debt – surpassing the Rs.72,658 crore accumulated over 58 years of united Andhra Pradesh. The Congress government has guaranteed loans worth Rs 25,000 crore to corporations within eight months, adding to its financial woes. This translates to a per capita debt of Rs 19,279, a burden borne by each citizen.

Critics argue that this borrowing spree has not translated into visible development. The capital expenditure for infrastructure development and asset creation shot up from Rs 8,373 crore to Rs 44,252 crore in 2023-24. The previous BRS government spent 18 per cent more than the annual target of capital expenditure during the previous fiscal. However, under the Congress regime, the capital expenditure has been not only reduced to Rs 32,745 crore, but only Rs 9,447 crore have been spent in first six months which is mere 28.85 per cent of the annual estimate.

While the Congress government touts its efforts to revitalise the economy, tangible results remain elusive. The decline raised concerns about the State’s fiscal stability, with economic experts warning of potential long-term damage. Critics accuse the Congress government of reckless borrowing and mismanagement, questioning its ability to steer Telangana back to growth.