Telangana’s revenue falls short by seven per cent over last fiscal

Analysts point out that even during the COVID-19 pandemic, the State managed to maintain revenue growth, making the current dip particularly alarming.

Hyderabad: Concerns are being raised over Telangana’s financial health as revenue receipts for the current financial year reached Rs 1.03 lakh crore by November, but fell short by around 7.05 per cent over corresponding period last fiscal. The State recorded a staggering decline of Rs 7,841.33 crore in revenue collections against around Rs 1.11 lakh crore secured by November last financial year, which is a first since the State formation.

Analysts point out that even during the Covid-19 pandemic, the State managed to maintain revenue growth, making the current dip particularly alarming. This downturn in revenue has sparked concerns about the government’s ability to sustain developmental activities without resorting to excessive borrowing.

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As per the data furnished by the Comptroller and Auditor General, key fiscal indicators for November pointed out that the State is also lagging behind in achieving the budgeted target of Rs 2.21 lakh crore. Tax revenue, a critical component of the State’s income, saw marginal growth in absolute terms — from Rs 87,083.94 crore in 2023-24 to Rs 93,553.51 crore in 2024-25. However, the increase falls short of expectations given the higher budget estimates for the current year, signaling inefficiencies in tax collection.

Borrowings and liabilities have reduced slightly from Rs 38,151.01 crore in 2023-24 to Rs 37,850.08 crore in 2024-25. Yet, the declining revenue and rising debt pose long-term risks. On the expenditure front, revenue spending including salaries, pensions and subsidies surged to Rs 1,17,588.41 crore in 2024-25 from Rs 1,14,746.13 crore in 2023-24.

Despite this increase, there has been no notable increase in welfare schemes or launch of new schemes. Further, capital expenditure also dropped sharply to Rs 20,968.03 crore in 2024-25 from Rs 29,288.35 crore in 2023-24, reflecting reduced investment in infrastructure and development projects.

Adding to the worsening financial condition, is the reported borrowing of Rs 10,000 crore, allegedly secured by mortgaging 400 acres of public land in December. Economists argue that such measures could exacerbate the State’s fiscal vulnerabilities, especially as no significant new projects have been initiated to justify the rising debt levels.