Telangana’s growth story loses steam as GSDP expansion slows under Congress rule

Official estimates indicate Telangana’s GSDP growth has slowed after the Congress government assumed office, compared to the high-growth phase witnessed under the previous BRS regime. Economists warn that continued moderation could impact employment generation, investments, tax revenues and future welfare expenditure.

Hyderabad: Telangana’s Gross State Domestic Product (GSDP) growth, long projected as the strongest indicator of the State’s economic momentum, has witnessed a visible slowdown after the Congress government assumed office, according to official budget estimates and Socio Economic Outlook report for the period between 2015-16 and 2026-27. If the trend continues, economists fear that the State might not even score a double digit growth rate in 2026-27 against projected 10 per cent growth over last year.

During the initial years after State formation and under the previous BRS regime, Telangana consistently recorded double-digit nominal GSDP growth (at current prices), often touching or crossing the 14 percent mark. Between 2015-16 and 2018-19, the State posted growth rates of 14.2 percent, 13.9 percent, 13.9 percent and 14.3 percent respectively — a phase economists describe as Telangana’s high-growth cycle.

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Even after the economic disruption caused by the COVID-19 pandemic, Telangana rebounded sharply. As per the RBI data, Telangana’s economy made a rapid recovery than others during the period. The State clocked a massive 19.4 percent growth in 2021-22 and 16.4 percent in 2022-23, reflecting rapid recovery in sectors such as agriculture and allied, IT, real estate, infrastructure, construction and services.

However, the trend began weakening thereafter. In 2023-24, the growth rate slipped to 11.9 percent. More significantly, projections for the years following the Congress government taking charge indicate further moderation, with growth recorded at 10 percent in 2024-25, 10.7 percent in 2025-26 and again a project 10 percent growth in 2026-27.

Analysts stated that while Telangana’s overall GSDP size continues to rise from Rs 14.60 lakh crore in 2023-24 to a projected Rs 19.61 lakh crore by 2026-27, the growth momentum has clearly slowed compared to the earlier high-growth phase.

Experts pointed out that GSDP growth is a critical measure because it directly impacts employment generation, tax revenues, industrial investment, infrastructure spending and the State’s fiscal strength. They argued that a continued decline in growth rates, could eventually affect Telangana’s ability to maintain aggressive welfare spending and capital expenditure simultaneously.

However, the Congress government has been maintaining that its focus was on balancing welfare commitments with long-term sustainable growth. Officials argued that economic expansion cannot be judged purely through headline GSDP numbers and that social sector investments would strengthen consumption and rural demand over time.

Nonetheless, the official projections themselves indicated that Telangana’s economy is now growing at a noticeably slower pace than during its earlier expansionary years, raising fresh concerns over the State’s growth trajectory in the coming decade.

Year-wise GSDP growth of Telangana:

Financial Year === GSDP ========== GSDP Growth Rate
2015-16 ———- Rs 5.78 lakh crore — 14.2 per cent
2016-17 ———- Rs 6.58 lakh crore — 13.9 per cent
2017-18 ———- Rs 7.50 lakh crore — 13.9 per cent
2018-19 ———- Rs 8.57 lakh crore — 14.3 per cent
2019-20 ———- Rs 9.50 lakh crore — 12.6 per cent
2020-21 ———- Rs 9.62 lakh crore — 2.2 per cent
2021-22 ———- Rs 11.24 lakh crore — 19.4 per cent
2022-23 ———- Rs 13.20 lakh crore — 16.4 per cent
2023-24 ———- Rs 14.60 lakh crore — 11.9 per cent
2024-25 ———- Rs 16.09 lakh crore — 10.0 per cent
2025-26 ———- Rs 17.82 lakh crore — 10.7 per cent
2026-27 ———- Rs 19.61 lakh crore (projected) —- 10 per cent (projected)