Telangana’s finances in freefall under Congress rule; revenues plummet, debts balloon, borrowing turns reckless

Alarming shortfall indicates Revanth Reddy government’s inability to generate funds, even as public expenditure continues unchecked

Hyderabad: Telangana’s financial condition under the Congress government has taken a sharp downturn, with plummeting revenues, ballooning debts and reckless borrowing creating severe economic imbalance.

The State’s revenue receipts stand at Rs 1,23,815 crore, a mere 55.96 per cent of the Budget estimates and a sharp decline from 63.20 per cent recorded during the same period last year.

This alarming shortfall indicates the Congress government’s inability to generate funds, even as public expenditure continues unchecked. Official data for the 2024-25 financial year up to January this year paints a bleak picture, exposing the government’s failure to manage resources effectively.

The State, which was ranked second in State Own Tax Revenue (SOTR) collections in the country under the BRS regime, is now struggling to reach its targets for the current fiscal. With less than two months for the end of the current financial year, the shortfall is evident across multiple sectors.

Stamps and registration revenue has collapsed to 31.94 per cent of the targeted Rs 18,228.82 crore, compared to 63.24 per cent last year, indicating a slowdown in real estate transactions. The Goods and Service Tax (GST) collections were pegged at Rs 42,657.9 crore, i.e. 72.8 per cent against a target of Rs 58,594.91 crore.

Similarly, excise revenue (liquor sales) has plunged to 60.84 per cent, a steep fall from last year’s 90.34 per cent, despite a hike in liquor prices. Serious concerns are being raised about the government’s poor enforcement and policy effectiveness. Even more concerning is the non-tax revenue, which has plummeted to a shocking 16.66 per cent, down from 90.20 per cent last year, exposing the administration’s failure to maximise income from State resources.

To compensate for this revenue shortfall, the Congress government has resorted to reckless borrowing, pushing Telangana into dangerous fiscal territory. The State has already borrowed Rs 58,586 crore against the Rs 49,225-crore market borrowing limit, exceeding the budgeted amount by 118.94 per cent, a significant jump from last year’s 106.85 per cent.

Capital receipts, primarily driven by borrowings, now stand at a staggering Rs 58,622 crore, surpassing the budgeted Rs 52,815 crore, showing an over-dependence on debt to fund even routine expenses. This has led to a drastic increase in interest payments, which have surged to 124.40 per cent of the budgeted amount, up from 85.25 per cent last year.

The consequence of this financial mismanagement is a record-high deficit, with the revenue deficit widening to Rs 26,050 crore, a catastrophic fall from the Rs 297-crore surplus projected in the Budget. While the revenue deficit indicates the difference between the revenue receipts and revenue expenditure, experts stated that the huge gap indicates the government’s utter failure to either estimate the revenue deficit or mop up adequate revenue to meet the expenses.

The fiscal deficit has ballooned to Rs 58,586 crore (118.94 per cent of the target), up from last year’s 72.87 per cent, exposing the unsustainable economic policies of the Congress government. Meanwhile, the primary deficit has reached Rs 36,530 crore (115.88 per cent of target), compared to 64.62 per cent last year, signaling the worsening fiscal situation.

Despite these financial challenges, the government’s expenditure remains unchecked, with total spending reaching Rs 1,78,947 crore (70.33 per cent of the Budget), up from last year’s 69.07 per cent, even as revenues shrink. Alarmingly, the capital expenditure remained marginally sluggish at Rs 28,311.89 crore against annual target of Rs 32,745.80, which is 86.46 per cent, compared to last year’s 90.8 per cent.

With plummeting revenues, rising debt, interest payments spiraling out of control and an unchecked fiscal deficit, Telangana’s financial health is on a dangerous decline. The Congress government’s inability to control borrowing, boost revenue or manage spending responsibly is pushing the State towards a deep financial crisis, raising concerns over future development, infrastructure, and welfare programmes.