Telangana's Fiscal Health: Surging Debt and Budget Allocations

The Telangana government presented a Rs. 2.91 lakh crore budget for 2024-25. Despite substantial revenue and expenditure plans, the state faces a significant debt of Rs. 6.71 lakh crore. Deputy CM Mallu Bhatti Vikramarka emphasized the need for fiscal reforms to ensure economic stability and reduce dependency on borrowings.

The Telangana government on Thursday presented a Rs 2.91 lakh crore state budget for 2024-25, with the total revenue expenditure expected to be Rs 2.21 lakh crore and capital expenditure Rs 33,487 crore.

According to Deputy Chief Minister and Finance Ministry In-charge Mallu Bhatti Vikramarka, who tabled the budget in the assembly, the state has racked up an overall debt of Rs 6.71 lakh crore in the past 10 years.

The total revenue has been estimated at Rs 2,90,814 crore, which includes Open Market Loans of over Rs 57,000 crore. Of the total revenue expenditure, Rs 17,730 crore would go towards interest payments during the fiscal.

The state's fiscal deficit has been pegged at Rs 49,255.41 crore in the 2024-25 budget, though it showed a revenue surplus of Rs 297.42 crore. Bhatti highlighted the state's heavy dependence on borrowings to fund expenditure, warning that this could potentially endanger fiscal sustainability without stringent reforms.

'Telangana’s debt has reached Rs 6.71 lakh crore. In the last 10 years, the state government debt has increased by 10 times without any development proportionate to that,' the minister said. The state government estimates Rs 1,38,181.26 crore in its own revenue, with additional non-tax and tax revenue from Telangana's central share.

Agriculture has been allocated Rs 72,659 crore, education Rs 21,292 crore, and irrigation Rs 22,301 crore. The Panchayath Raj and Rural Development department will receive Rs 29,816 crore, while Rs 10,000 crore is earmarked for the development of Hyderabad and Rs 11,468 crore for the health department.

After the Congress government took over, Rs 35,118 crore debt has been raised and Rs 42.892 crore in loans—both principal and interest—have been repaid, Bhatti said. He noted the significant challenge the newly-formed Congress government faced in managing a financially distressed state, but steps to control frivolous expenditure and instill financial discipline were initiated.

Efforts are being made to pay salaries and pensions timely to 3.69 lakh government employees and 2.87 lakh pensioners from March 2024. Telangana’s Gross State Domestic Product (GSDP) for 2023-24 stands at Rs 14,63,963 crore, an 11.9 percent increase.

Additionally, BRS chief and former chief minister K Chandrasekhar Rao attended the assembly for the first time as the leader of Opposition, according to party sources.