A report by the Comptroller and Auditor General (CAG) has highlighted strained public finances in Telangana during 2024-25, marked by under-utilisation of the budget, poor revenue mobilisation, rising debt, and irregularities in tax administration.
The report noted that the government managed to keep the fiscal deficit within projected levels through borrowings, but the widening revenue deficit and increasing debt burden could remain a concern for the state's fiscal sustainability.
The Telangana government was unable to utilise its budget in line with the targets set for the 2024-25 financial year, spending only ₹2,18,251 crore against the ₹2,74,058 crore projected in the budget under revenue and capital expenditure, which amounted to 80%.
Under the revenue expenditure, the government had estimated spending ₹2,20,945 crore, but actual spending stood at ₹1,77,224 crore, which was also about 80% of the estimate.
In contrast, under capital expenditure, the government had proposed to spend ₹33,487 crore, but ended up overspending by 108%, with a total of ₹36,072 crore spent in the current financial year.
The report also pointed out that the government had projected ₹17,730 crore towards its interest payment obligations in the year. However, the actual burden was much higher, with the state paying ₹27,803 crore.
Similarly, under the salary and allowances bill for government employees, the government had budgeted ₹28,093 crore, but had to spend ₹30,277 crore, leaving little room for development, welfare spending.
The CAG also pointed out a sharp shortfall in revenue receipts. The state had expected ₹2,21,242 crore in revenue receipts, but the actual collections stood at ₹1,67,804 crore, 76% of the estimate.
The shortfall was particularly severe in non-tax revenue and grants expected from the Centre. Under non-tax revenue, the government had projected collections of ₹35,208 crore, but realised only ₹23,608 crore, or 67% of the estimate.
Likewise, the state had anticipated receiving ₹21,636 crore in grants from the Central government, but actually received only 37% of that with ₹7,913 crore.
The government had originally projected that revenue receipts would exceed revenue expenditure, resulting in a modest revenue surplus of ₹297 crore. However, the state ended up with a revenue deficit of ₹9,420 crore.
At the same time, the state had estimated a fiscal deficit of ₹49,256 crore. The actual fiscal deficit was found to be ₹48,922 crore, broadly in line with projections. The government bridged this deficit by raising ₹48,922 crore through open market borrowings.
The report said the state raised a total of ₹65,537 crore in open market loans during 2024-25. This figure included ₹5,842 crore of unpaid old Ways and Means Advances (WMA). As a result, the state's total outstanding debt rose to ₹4,47,493 crore by the end of FY2024-25.
The CAG noted that the state had issued guarantees for loans amounting to ₹57,305 crore during the year, taking the total guaranteed debt to ₹2,41,528 crore.
The state also borrowed ₹759 crore from institutions such as LIC, GIC and NABARD. Further, under Ways and Means Advances, which are typically availed to meet short-term liquidity needs, the state borrowed ₹1,29,376 crore and repaid ₹1,24,534 crore during the year.
