Telangana’s total outstanding debt, including liabilities of state-owned entities and government guarantees, has reached Rs 8 lakh crore as of December 2025, according to the ‘Socio-Economic Outlook 2026’ released by the state government.
The report highlights that between December 2023—when the Indian National Congress assumed power in the state—and December 2025, total borrowings by the government and its entities stood at Rs 3,19,179 crore. During the same period, repayments amounting to Rs 3,04,202 crore were made, covering both principal and interest.
This trend indicates that a significant portion of fresh borrowings was utilised to service existing debt, reflecting the burden of liabilities inherited from the pre-December 2023 period. The report noted that the rise in outstanding debt must be viewed in the context of “large and unavoidable interest payments” and substantial principal repayments, alongside the need to sustain welfare schemes and developmental expenditure.
Of the total repayments made during the period, Rs 1.90 lakh crore was directed towards principal, while Rs 1.14 lakh crore accounted for interest payments. Despite raising Rs 3.19 lakh crore in fresh loans, the state’s fiscal strategy appears to have focused on balancing debt servicing obligations with ongoing public spending commitments.
The report describes Telangana’s fiscal position as being in a “transitional phase” marked by consolidation and reprioritisation of expenditure. It suggests that future financial planning should prioritise medium-term fiscal sustainability while continuing to support economic growth and development goals.
On the economic front, Telangana has posted robust growth. The state’s Gross State Domestic Product (GSDP) for 2025–26, based on provisional advance estimates, is projected at Rs 17.82 lakh crore, reflecting a growth rate of 10.7 per cent—well above the national growth rate of 8.0 per cent as estimated by the Ministry of Statistics and Programme Implementation.
The growth has been largely driven by the services sector, particularly information technology, trade, transport, and communication. Additionally, Telangana’s per capita income for 2025–26 is estimated at Rs 4.19 lakh, significantly higher than the national average of Rs 2.20 lakh, with a growth rate of 10.2 per cent.
The report concludes that while debt levels remain elevated, the state continues to demonstrate strong economic performance, underpinned by a dynamic services sector and relatively high income levels.
Follow us
