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